Since the optimism surrounding the listing of the Ethereum spot ETF, the price of Ethereum has surged from $3,100 to nearly $4,000, reaching a two-month high. Analysts have three reasons to believe that ETH’s performance will be stronger than BTC’s and may reach a target price of $10,000 by the end of the year.
Firstly, the growth of internet activity. With the preliminary approval of the Ethereum spot ETF, the regulatory risk of ETH being classified as a security has been avoided, which makes investors pay more attention to participating in the Ethereum ecosystem. According to DappRadar, the transaction volume of DApps on Ethereum reached $58.81 billion in the past week, an increase of 7.5%. CryptoQuant’s data also shows that the number of smart contracts on Ethereum increased from 37,870 on May 20 to 38,066 on May 31. The meme coin $PEPE on Ethereum has also reached new highs. These data indicate the continued growth of Ethereum’s network activity, which helps promote the burning of ETH, reduce supply, and facilitate price increases.
Secondly, the likelihood of the Ethereum spot ETF being listed has increased, which has also contributed to the bullish momentum of ETH. Bloomberg ETF analyst Eric Balchunas estimated that the Ethereum spot ETF will be launched on July 4, but with BlackRock submitting revised S-1 documents, he believes that it is very likely to be officially launched at the end of June. Discus Fish, the founder of digital asset custody solution provider Cobo, also predicted that the S-1 document of the Ethereum spot ETF may be approved in mid-June. Although some institutions predict a later listing time, with Galaxy Digital predicting July or August, and JPMorgan predicting November, Zaheer Ebtikar, co-founder of cryptocurrency hedge fund Split Capital, believes that a delay in the listing of the Ethereum spot ETF by the SEC would actually be beneficial for ETH’s price increase, as it would give market participants time to buy ETH before potential capital inflows from the ETF.
Lastly, from a technical perspective, the ETH/BTC ratio has been rising since May 17 and reached a two-month high of 0.05744 on May 27, with a gain of over 28%. Nancy Lubale stated that the weekly chart of ETH/BTC shows a bullish divergence with the relative strength index, indicating that the “reversal of the trend has begun.” This is consistent with the view of Michaël van de Poppe, a trader and founder of MN Trading, who stated that as long as the ratio remains above 0.051, ETH is considered bullish. On May 16, he even stated that he had converted all his Bitcoin positions into other currencies.
With the imminent approval of the Ethereum spot ETF, market participants generally believe that this will stimulate the price of ETH to reach new highs. Standard Chartered Bank previously predicted that the price of Ether may reach $8,000 by the end of this year after listing, and Andrey Stoychev, Chief Business Officer of Nexo, expressed even more optimism.
(Reference: 自從以太坊現貨 ETF 的上市變得樂觀,以太幣價格從 $3,100 飆升至近 $4,000,創下兩個月新高。分析師以三個理由,看好 ETH 表現將強於 BTC,並可能在年底達到 $10,000 的目標價。)