As an experienced analyst, I’ve closely monitored the cryptocurrency market for years. Ethereum (ETH) has been a subject of interest due to its underperformance compared to Bitcoin (BTC) and other altcoins this year. However, recent data from Coinbase has piqued my curiosity, suggesting that Ethereum’s long-term positioning remains robust.
Ethereum (ETH), the world’s second-largest cryptocurrency, has underperformed Bitcoin and many other altcoins in the market recently. However, according to a recent report by Coinbase, Ethereum’s long-term outlook remains robust, suggesting that it may soon surprise investors with impressive gains.
As a researcher, I’ve observed that Ether, the second-largest cryptocurrency by market value, has experienced a 29% growth so far this year. This pales in comparison to Bitcoin (BTC), which has seen an impressive surge of 50%. However, according to Coinbase’s latest report, there is a possibility that Ether could outperform and surprise to the upside in the upcoming months.
According to Coinbase analyst David Han’s latest findings, the altcoin presently lacks significant sources of supply-side pressure. There are no major factors like miner selloffs or token releases currently influencing its supply.
In contrast, staking and layer 2 expansion have significantly contributed to the increase in Ethereum’s liquidity. Ethereum’s role as the hub of decentralized finance (DeFi) is expected to remain strong based on the widespread usage of the Ethereum Virtual Machine (EVM) and its advanced layer 2 solutions.
As a researcher studying Ethereum, I can explain that the Ethereum Virtual Machine (EVM) serves as the fundamental processing engine for the Ethereum blockchain. It empowers developers to construct smart contracts, while enabling nodes to engage with them. In an attempt to mitigate issues related to scaling and data congestion, innovative solutions known as Layer 2s have emerged. These are independent blockchains that operate on top of the base layer (Layer 1), providing additional capabilities and enhancing overall performance.
Don’t Discard Spot Ethereum ETFs
Additionally, Coinbase points out that the likelihood and timing of Ethereum spot ETFs being approved should not be discounted. The exchange expresses the view that the market may be underestimating these possibilities, creating room for unexpected positive developments.
Next week on May 23 marks the initial approval deadline for the Ethereum spot ETF on the New York Stock Exchange. Yet, according to some market analysts, the probability of this happening is quite low at present. In fact, these experts predict that US Ethereum spot ETFs may not be available until late in 2025.
“Despite a potential rejection of the initial deadline on May 23, 2024, we remain optimistic that legal action could overturn this decision. In the meantime, we are confident that the underlying demand factors for ETH, along with the continuous technological advancements within its community, will allow it to maintain its presence in various narratives.”
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2024-05-17 16:27