jakiro
Author: Climber, Bitchain Vision
Vitalik Buterin once described it like this:Bitcoin is a pocket calculator, while Ethereum is a smartphone.Now, the smartphone is about to be recognized by the sovereign U.S. government.
On May 24, Beijing time, the Ethereum spot ETF was officially approved, becoming another cryptocurrency fund product officially recognized by the US SEC.This is not only the glorious moment for Ethereum, the “king of thousands of chains”, but also a major benefit to the crypto market.
Looking back at the direction of this incident, it is unexpected. Before May 21, Ethereum spot ETF is only 25%, but with the revelation of Bloomberg analyst Eric Balchunas, the SEC attitude may be 180 degrees based on political reasons.After a big turn, this number soared to 75%.The SEC also requires many applicant institutions to submit 19b-4 modification documents urgently.
Now that the dust has settled and the crypto market is in a carnival, we might as well look back on the development history of Ethereum and sort out the predictions of many institutions and professionals to have a general understanding of the future trend of ETH.
1. Common knowledge of Ethereum
Ethereum is a decentralized, open source and smart contract function public blockchain platform. Ethereum is the native cryptocurrency of Ethereum.Ethereum is the second most valuable cryptocurrency in the crypto market, second only to Bitcoin, and Ethereum is also the blockchain with the most users.
From 2013 to 2014, programmer Vitalik Buterin was inspired by Bitcoin and proposed the concept of Ethereum for the first time, which roughly means “the next generation of cryptocurrency and decentralized application platform.”At the same time, he first introduced Ethereum in his white paper published in 2013.Buterin and other co-founders officially launched the Ethereum blockchain on July 30, 2015 through online crowdfunding of the project in the summer of 2014.
The main innovation of Ethereum is that it designs a platform that can execute smart contracts using blockchain, thereby further strengthening the technical advantages of existing smart contracts.In addition to smart contracts, Ethereum’s blockchain can host other cryptocurrencies by using its ERC-20 compatible standards.
Ethereum’s goal is to become a global decentralized application platform, allowing users around the world to write and run software without being censored, without failures and downtime, and fraud.
In 2022, Ethereum transitioned its consensus mechanism from Proof of Work (PoW) to Proof of Stake (PoS), a move that reduced Ethereum’s energy usage by 99%.At the same time, the name of this transformation has been changed from “Ethereum 2.0” to “Merge”.
Since the release of the white paper in 2013, a total of 25 milestone events have occurred, most of which are forked upgrades, and the relatively important ones are 12 upgrades, and the most recent one is Cancun.
2. Ethereum spot ETF
Ethereum ETF is a financial product designed to track Ethereum prices, enabling investors to buy and sell stocks on traditional stock exchanges.This regulated investment pathway provides investors with a convenient way to participate in the cryptocurrency market without having to directly manage digital assets.
Ethereum ETF operates within the regulatory framework of traditional financial markets, which enhances investor confidence and ensures compliance with established financial standards.At the same time, ETFs copied Ethereum’s performance, providing expansion to its value without involving the complexity of ownership.
In addition to being easy to access, Ethereum ETFs also offer the benefits of regulatory oversight, trading convenience, and diversified portfolios.These funds trade on major stock exchanges, providing liquidity and ease for investors who may be new to the cryptocurrency market.
The current Ethereum spot ETF application companies include VanEck, 21Shares&ARK, Hashdex, Grayscale, Invesco&Galaxy, Fidelity, BlackRock, Franklin, and Bitwise.
Variant Fund Chief Legal Officer: If the SEC approves Ethereum spot ETF, it means it recognizes that non-pending ETH is not a securities.The agency has previously refused to acknowledge that any assets other than Bitcoin are non-security commodities.
3. Event impact: ETH multiple data set high
On May 23, Grayscale EthereumTrust(ETHE) 21stTrading volumeIt reached US$687 million, a record high since May 2021, reaching US$680 million.The previous high was $842 million on May 19, 2021.
Data on May 22:
Matrixport issued a statement saying that due to the approval of Ethereum spot ETF, Ethereum has created its historyMaximum single-day fluctuation record.On the same day, the EthVol (Ethereum Volatility) index launched by financial index company T3 Index and LedgerX rose to 81.14, close to the highest level of 86.7 in a year, with a daily increase of 12.07%.
ETH’s previous biggest volatility was concentrated in May 2021, when DeFi trading volume was close to its peak.And the two big fluctuations so far in 2024, mainly policy-driven, are related to the SEC and FOMC meetings.
EthereumFutures ETFGenerate $47.75 millionTrading volume, 40% higher than the peak of $34.18 million set when Ethereum approached the $4,000 mark on March 5.
The open positions in Ethereum futures contracts across the entire network reached US$15.6 billion, continuing to hit a record high.
The number of small Ethereum wallets holding up to 10 ETH reached 121 million, a record high.
Three spot Ethereum ETFs in Hong Kong soared collectively, with net inflows exceeding HK$5 million at midday as of May 22, marking the largest net inflow since its launch.
4. Historical trend of ETH currency price
Before January 2017, ETH prices were mostly below $10, and then rose all the way after that, and finallyArrived at its first all-time high in mid-January 2018, about $1,300,The increase is about13000%.
From January 2018 to July 2020, ETH entered a long ice age, with the lowest price falling to around US$110, a drop of 91.5%.
But with the Fed’s huge profits, a violent bull market in cryptocurrency is coming.Starting in summer 2020, ETH enters the rush mode.AfterwardsMay and November 2021 hit record highs, rising to a maximum of US$4,810.If the previous round of low points is counted, the increase will be as high as 4272%.
Since then, bulls have gone and bears have come, and ETH has fallen to around US$881, a drop of 81.68%.Bear City lasted for two years, from November 2021 to October 2023.
Thanks to the passage of Bitcoin spot ETFs, the crypto market has gradually entered a bull market, and ETH has also ushered in a warm spring.The price of the currency rose to $3,800, with an increase of about $3,800.322.2%.However, compared with the increase in other blue-chip currencies, ETH’s performance is at the bottom.
5. Market forecast: Generally speaking, it exceeds $5,000
Standard Chartered Bank: The annual target price of Ethereum is8000USD, Ethereum price will reach by the end of 202514000Dollar.Geoff Kendrick, head of Forex Research and Digital Assets Research at Standard Chartered Bank, said it is expected that the Ethereum spot ETF will drive 239 to 9.15 million Ethereum inflows in the first 12 months after approval.In US dollars, it is approximately equivalent to $15 billion to $45 billion.
Bernstein: Approval of the spot Ethereum ETF will drive its price to soar 75% to $6,600.Bernstein analysts estimate that the SEC approved a similar bitcoin product in January, which stimulated a 75% increase in bitcoin prices in the next few weeks, and ETH is expected to behave similarly.
Lyra: Ethereum has a 20% chance of breaking through at the end of June5000Dollar.Lyra founder and former Wall Street options trader Nick Forster said that according to Lyra options market hints, the probability of Ethereum reaching $5,000 by June 28 is about 20%, exceeding it before July 265500The probability of US dollar is also 20%.
ZhuSu: If the Ethereum spot ETF is approved, Ethereum will rise to $5,400.
QCP Capital: If the BTC ETF is approved, it can be used as a reference. If the ETH ETF is approved, ETH may rise by 60%.ETH’s short-term target is $4,000 and will reach $5,000 later this year.
Coinbase: Ethereum may experience unexpected gains in the next few months.Ethereum lags behind the broader cryptocurrency market this year, but its long-term positioning remains strong and has a potential for unexpected gains.
Bloomberg: Ethereum ETF is the biggest factor in boosting the crypto market since 2022.
ConsenSys CEO: If the Ethereum spot ETF is approved, the resulting “demand torrent” for Ethereum may lead to supply tightness, thusPushing up the price of Ether.
The CEO explained that institutions that have reached Bitcoin through the newly launched Bitcoin ETF are “most likely to want to spread their investments into the second approved ETF”, the natural, backlog demand for buying Ethereum through ETFsIt will be quite large, but there will be less supply to meet this demand than when the Bitcoin spot ETF was approved in January this year.
Bybit Financial Product Director: The market still underestimates the potential of Ethereum, and ETH remains the most decentralized, tested and technologically outstanding work ever.I hope Ethereum can get a proper valuation.
JMP Securities: Coinbase will benefit from Ethereum ETFs.
Other views:
Bloomberg ETF analyst: Ethereum ETFs may only account for 15% of Bitcoin ETF assets.
Economist Peter Schiff: It is expected that funds will shift from Bitcoin ETFs to Ethereum ETFs after the US SEC approval, which may have a negative impact on spot Bitcoin ETFs and Bitcoin.
Kryptanium Capital: If the Ethereum ETF is approved, the best trading strategy is to buy SOL/ETH.
Summarize
By market capitalization, ETH is the second largest cryptocurrency, second only to Bitcoin (BTC).However, in the evaluation of traditional financial institutions or crypto institutions, there is a huge gap in the financial value attributes between the two.This time, the SEC approved the Ethereum spot ETF, which is undoubtedly an affirmation and recognition of ETH.
Judging from the above-mentioned ETH price trend, the price increase trend of its currency is gradually declining.However, with the passage of ETFs, Ethereum has become a hot spot in the eyes of a number of investors, and has predicted new historical highs.Whether Ethereum can become the “next generation of cryptocurrencies and decentralized application platform” can be left to the market and time to test.
