Experts See Two Factors Driving Ethereum to $10,000 in Catch-up Rally with Bitcoin – DL News

Bitcoin just hit a new high, and the broader crypto market is now worth more than $2.6 trillion.

Ethereum has not been lost in the bullish run, rising more than 65% since the start of the year.

That’s impressive, but Ether is still 21% below its record high of $4,800 with $3,809 in the late afternoon UK time on Wednesday.

What gives?

In a word, time.

Szymon Sypniewicz, CEO of crypto-boarding solution Ramp, said it may simply take longer for the market to understand Ethereum’s complexity, especially “compared to the much simpler idea of ​​Bitcoin as digital gold.”

New financial system

Ethereum enthusiasts have long argued that the second most valuable blockchain network will be the infrastructure of an entirely new financial system.

Through smart contracts, supporters point to a future with more transparent markets, signed versions of popular funds and faster settlement times.

Others say it’s only a matter of time before institutional investors take larger positions in Ether. And the advent of Bitcoin ETFs may increase their appetite.

“ETH hasn’t hit its institutionalized hype cycle yet,” like Bitcoin has, Robby Greenfield, co-founder and CEO of payments protocol Umoja Labs, told DL News. “Thus, the vast majority of new inflows from the BTC ETF will naturally lead to increased buying pressure, along with the upcoming BTC halving,”

Greenfield predicted that Ethereum will close the gap with Bitcoin in terms of its profits.

He told DL News that the cryptocurrency should “clear $10,000 this year”.

Greenfield added that an Ethereum ETF approval would undoubtedly help increase its value. He joins a host of industry players counting on the US Securities and Exchange Commission to follow up its January approval of Bitcoin ETFs with a green light for Ether.

“It would be good for investors to have access to ETH in a way that is easy and familiar.”

— Eugene Cheung, Bybit

“An ETH ETF obviously needs to be approved,” Eugene Cheung, Bybit’s Head of Institutions, told DL News. “It will be good for investors to have access to ETH – one of the world’s leading risk assets – in a way that is easy and familiar.”

Perhaps so, but the SEC, and especially its hard-charging chair, Gary Gensler, may take a different approach to an Ether ETF.

Gensler admitted that he reluctantly opened the way for Bitcoin after the commission lost a court ruling in its attempt to block Grayscale from turning its BTC trust into an ETF.

There is no such court case driving decision making on an ETH ETF.

The SEC is expected to weigh in on a slew of different Ethereum ETF applicants in May, including those from BlackRock and Fidelity.

Crypto prediction market Polymarket puts the chance of approval at 43%. JPMorgan’s latest analysis gives it a 50% chance.

Bloomberg ETF analyst Eric Balchunas called an Ethereum ETF “small potatoes,” describing it as “the opening action that happens after the headline.”

Ethereum upgrade

However, JPMorgan points to another catalyst for Ethereum: the Dencun upgrade, which is designed to help the network scale up by cutting costs for various rollup solutions on the market.

Digests bundle crypto transactions, whether simple swaps or lending activity, into much smaller chunks of data.

These small chunks are then settled on Ethereum, reducing the overall data footprint on the network.

Bybit’s Cheung says this is good news for Ethereum supporters.

“With layer 2 solutions built on top of Ethereum, the blockchain becomes the settlement layer for a whole new digital infrastructure that includes gaming, trading and investing,” he told DL News.

“The value of all this will tend to accrue to the ETH asset.”

Unlike Bitcoin’s automatic halving event, Ethereum’s Dencun upgrade does not regulate the cryptocurrency’s scarcity. Unlike Bitcoin’s pre-programmed 21 million token cap, Ethereum’s supply is infinite.

Not a sure thing

However, the success of the upgrade is not a sure thing for the asset’s price performance.

The layer 1 competition is heating up, and one executive says Ethereum may even be overtaken this cycle.

“Given the network’s poor performance during periods of high activity and the proliferation of alternative layer 1 protocols optimized for Ethereum’s shortcomings, Ethereum’s position as the second-tier cryptocurrency is not necessarily guaranteed this cycle,” CMO of crypto exchange VALR , Ben Caselin , told DL News.

Liam Kelly is DL News’ Berlin correspondent. Contact him at [email protected].