Ethereum reached a new high this morning at $4,093.92, surpassing the market value of Walmart and becoming the 19th largest asset globally. What other potential factors are driving the rise in the price of Ether?
Summary:
Bitcoin breaks $72,000! MicroStrategy makes another $820 million purchase of 12,000 BTC.
Background:
Bitcoin’s market value surpasses silver, becoming the 8th largest asset globally! The next target is Google.
Table of Contents:
Ether surpasses Walmart to become the 19th largest asset
Positive factor 1: Dencun upgrade launching tomorrow
Positive factor 2: Ethereum spot ETF may be approved in May
Positive factor 3: Expectation of a repeating market cycle
Bitcoin soared to $72,800 in the early morning of the 12th, setting a new record high. At the same time, Ethereum also reached a new high this year, briefly touching $4,093.92. As of the time of writing, it was reported at $4,062.79, a nearly 5% increase in the past 24 hours.
Source: Binance
Driven by this surge, Ethereum’s market value exceeds $485 billion, surpassing the world’s largest retailer Walmart and becoming the 19th largest asset globally, surpassing enterprises such as SPDR S&P 500 ETF Trust, LVMH, and iShares Core S&P 500.
Source: 8MarketCap
Besides being driven by the overall cryptocurrency market rise led by Bitcoin, what other potential positive factors are there for Ethereum’s recent significant increase? Here are several potential catalysts summarized for readers.
The Dencun upgrade for Ethereum is set to be activated on March 13, 2024, at 21:55 Taiwan time. Market expectations for this upgrade are that it will greatly contribute to the rise of Ethereum and Layer 2 projects.
The core of the Cancun upgrade is EIP-4844, also known as “proto-danksharding,” which is the first step in Ethereum’s scalability. It introduces a new transaction type (blob-carrying transactions) by providing more space for data “blobs” to expand the blockchain. It achieves temporary storage and retrieval of off-chain data through Ethereum nodes, thereby reducing transaction fees on Layer 2 networks.
Source: IntoTheBlock
According to IntoTheBlock’s data, the estimated transaction fees for trading on DEX before and after the Dencun upgrade are as follows:
– Aribitrum’s gas fee will decrease from $2.02 to $0.4.
– Optimism will decrease from $1.42 to $0.28.
– Base will decrease from $0.58 to $0.01.
The significant reduction in transaction fees will help trigger a comprehensive explosion of applications on Layer 2, and this trend has already begun. According to L2BEAT’s data, the current total value locked (TVL) on Ethereum Layer 2 has climbed to $39.63 billion, reaching a new high with a 7-day increase of 15.42%.
Source: IntoTheBlock
After the approval of Bitcoin’s spot ETF, it has attracted nearly $9.6 billion in fund inflows, which has had a significant positive impact on Bitcoin’s price. Therefore, the market’s optimistic expectation for Ethereum’s spot ETF to be approved by the SEC has also become a major catalyst for Ethereum’s rise.
Although experts have different opinions on whether Ethereum’s spot ETF will pass in May, Colin Wu, the founder of the blockchain, emphasizes from a different perspective. Colin Wu emphasized that public opinion is crucial in a democratic society. Currently, Ethereum’s public opinion seems to be fine. He also pointed out that Ethereum co-founder Vitalik Buterin, as a Russian, supports Ukraine in the Russian-Ukrainian conflict, which is a positive factor for Ethereum’s image in the eyes of the United States.
Experienced players in the cryptocurrency market often discuss market cycle patterns, believing that Bitcoin often leads the way in a rise, followed by Ethereum and other major tokens, and eventually a sharp increase in small tokens, marking the arrival of the so-called Altseason.
Currently, Bitcoin’s market dominance remains strong, accounting for 53.7%. Based on this situation, investors may position themselves early for the next possible rising cycle, especially for Ethereum and other major tokens, thereby further driving up Ethereum’s price.
Source: @wacy_time1 X
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