Ethereum's native token surpasses $3,000, marking a significant milestone amidst a broader cryptocurrency surge. ETH's resurgence, driven by market demand and upcoming ETF prospects, fuels optimism.
Ethereum’s primary token surged to $3,000 on February 20th, after a sustained uptrend that attracted significant investment across various cryptocurrencies in 2024.
This milestone marked the first time since April 2022 that Ethereum (ETH) reached such heights, confirming the prevailing optimistic outlook on the second-largest cryptocurrency and its blockchain. According to data from CoinMarketCap, ETH recorded a growth of over 2% within the last 24 hours and more than 13% over the past week.
Following this latest surge, Ethereum's market capitalization now exceeds $355 million, constituting slightly over 18% of the total cryptocurrency market. Year-to-date (YTD), ETH has appreciated by 30%.
The rise of Ether coincides with increases in Bitcoin (BTC) and the overall cryptocurrency landscape. Bitcoin has seen heightened demand after the U.S. SEC permitted the trading of spot BTC ETFs on major national exchanges such as NASDAQ and CBOE.
Several analysts have attributed the surge in interest in crypto markets to the introduction of spot Bitcoin ETFs. Data from TradingView supports this narrative, showing a nearly 20% expansion in crypto market capitalization within the first two months of the year.
ETH's ETF Momentum
Various issuers are vying to introduce similar products with ETH as the underlying asset. As per a report from crypto.news, multiple issuers ranging from ARK 21Shares to Invesco Galaxy have submitted applications to list spot Ethereum ETFs on U.S. exchanges.
While such products already exist in the form of futures contracts, which track projected Ether prices instead of spot prices, the SEC has historically rejected spot-based crypto products due to concerns regarding market manipulation and fraud. However, Judge Neomi Rao's ruling in the Grayscale case challenged this stance.
Judge Rao criticized the SEC's decision as "arbitrary and capricious," finding their approval and denial process for similar products legally insufficient.
Industry insiders are optimistic that similar reasoning could apply to ETH-based products, although SEC Chair Gary Gensler has expressed divergent views on occasion. Gensler has yet to definitively classify Ethereum as a security but maintains that the majority of cryptocurrencies fall under financial regulations.
Analysts speculate a 50% probability of spot Ethereum ETFs, tracking ETH prices, receiving regulatory approval in the second quarter of 2024.
The SEC has postponed its decision on spot Ethereum ETFs until May, coinciding with ongoing technological upgrades that are bolstering optimism surrounding the cryptocurrency. ETH developers aim to implement Dencun on the mainnet before March's end.
Dencun introduces proto-danksharding, an update designed to enhance data availability for layer-2 rollups. This solution will incorporate blobs into on-chain activities and is anticipated to reduce gas fees, thereby facilitating easier and more cost-effective transactions within Ethereum's ecosystem.