Three Reasons ETH Will Break Its Yearly High
As the crypto market revels in the joy of a potential Bitcoin spot ETF approval, most cryptocurrencies put up respectful numbers over the past weeks. Among the top 10 list, Solana and Cardano rallied over 10%, while others saw similar gains. There is one crypto, however, that has been oscillating for several weeks and falls behind its competitors - Ethereum. In fact, ETH/BTC has sunk to its lowest point since last July.
So what’s ETH waiting for? Will a price surge ever come? Let’s find out now.
Why is ETH lagging behind?
At the beginning of 2023, as the layer-2 landscape thrived, so did Ethereum. ETH crossed the US$2,100 mark and hit its YTD high in April, several weeks after Arbitrum, the largest layer-2 solution, airdropped its governance token ARB to the community. Days later, PEPE, the phenomenal meme coin of the year, hit the market and wedged its way into the top 100 cryptocurrencies.
Little did we know that was the highest point ETH would reach in several months.
After May, ETH only mustered one failed attempt at challenging the US$2,000 mark and even fell behind when BTC crossed its YTD high in October. On-chain activities are also declining. Transactions on Arbitrum fell by ⅔ compared to March. There hasn’t been an exciting memecoin or NFT collection for months, and challengers such as SOL and ADA have all seen substantial increases in their user bases. But fear not. Things are about to get interesting soon.
Three reasons ETH may take off
The next big thing
The ICO boom in 2018 propelled ETH to the second-largest cryptocurrency by a large margin. The DeFi summer in 2020 and NFT rave in 2021 saw another jump in ETH’s price. Even this April, Arbitrum and PEPE fueled another surge and helped ETH reach its YTD high.
The entire crypto industry is waiting for the next big thing in the Ethereum ecosystem that will attract millions of new users. It could be account abstraction, RWAs, DePINs, or some epic but dank meme coin. One thing is certain: when it explodes, so will ETH’s price.
I got ETFs, too!
As the SEC decided not to appeal the Grayscale case, the approval of a BTC spot ETF seemed imminent, and people flocked to the crypto market to buy BTC. Although there are several ETFs that grant you exposure to ETH, none of them are spot ETFs. The arrival of a BTC spot ETF may be as early as the end of this year, and there’s nothing stopping these firms from seeking exposure to spot ETH, the second-largest cryptocurrency and most capable challenger of Bitcoin. When that happens, there will be just as many, if not more, people trying to buy ETH, hiking its price up in the process.
ETH has had a 50% increase in price since ‘the Merge’ - switching from PoW to PoS. This may look impressive but falls short behind BTC and its many other competitors.
Soon, ETH will step into the next stage on its roadmap, aptly named ‘the Surge’. This upgrade will be implemented at the end of 2023 and lay the groundwork for ‘proto-danksharding’, a database partitioning technology that will drastically increase Ethereum’s throughput.
The Surge will put Ethereum Mainnet on par with its many layer-2 solutions and layer-1 competitors, capable of processing up to 100,000 transactions per second with transaction fees as low as a fraction of a cent. Like the layer-2 craze that saw ETH’s price reaching its yearly high, the Surge may have the same effect since developers and investors will hail this upgrade and prosper the Ethereum ecosystem.
As the second largest cryptocurrency, ETH has always been able to sneak in a few surprise surges between the ebb and flow of the crypto market, steadily gaining territory following BTC’s lead. Although no oracle can predict ETH’s price, there is still much to look forward to before the end of 2023. Stay tuned to Bitget Academy as we bring fresh content to you every day about everything crypto.
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