Ethereum sets a New All-Time High as Traders Price In Possible ETH-ETF Approval

Ethereum surpasses $510 billion in Market Cap after surpassing a new all-time high with some bullish news expected from the SEC.

By
Chung Yee
on
October 31, 2021
Category:
Breaking News

Ethereum ETF is in the Cards

Ethereum, the second-largest cryptocurrency by market cap, surpassed $510 billion as it briefly touched a new high of $4,455, per CoinMarketCap

Ethereum’s rise is backed by some positive developments that may see more upside potential for the remainder of Q4. The recent surge in buying interest is a confluence of a few factors that boosted the market’s confidence. 

First, investors are optimistic that the US Securities and Exchange Commission (SEC) is likely to announce the country’s first Ethereum Exchange Traded Fund (ETF). Bitcoin ETF for futures contract was approved, and the approval provided the much-needed catalyst to break past the psychological barrier of $60,000 and clock a new all-time high at $66,930. 

“Rapidly rising Ethereum open interest and volume show that a U.S. ETF is only a matter of time, with positive implications for the price and negative for volatility,”  tweeted Senior Commodity Strategist for Bloomberg Intelligence, Mike McGlone.
Source: Traders are betting on SEC’s green light for an Ethereum ETF soon 

Secondly, Ethereum’s recent Altair upgrade, launched on October 27, sets the base for a merger from the current Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus mechanism. Ethereum holders and validators are supposed to benefit from this upgrade as Eth’s issuance will reduce by 90%, tying down to EIP-1559

Thirdly, Bitcoin has maintained its price at around $60,000, maintaining its trajectory on course according to Plan B’s Stock-to-Flow (S2F) model. Bitcoin is the largest cryptocurrency by market cap, and its price movement will directly impact all crypto assets across the board. There are fears that a further dip in price would invalidate the S2F model and bring an early end to the bull cycle.   


Ethereum’s Massive Potential 

Ethereum is the top Layer 1 smart contract platform. Numerous criticisms were leveled against the platform for its expensive gas fee, transaction speed, and inability to scale, but Ethereum is still the platform of choice by many developers. Ethereum is still the choice for Decentralized Finance (DeFi) protocols as its underlying blockchain and smart contract platform. 

“The most actively developed protocols are Ethereum and Cardano, in a league of their own considering code commits with 866 and 761 average weekly commits,” said a report published by Outlier Ventures for Q1 of 2021.
Source: Plan B’s S2F is the most used price prediction model in the market and has thus far been accurate 

Currently, the two leading crypto assets that are catching the eyes of institutional investors are Bitcoin and Ethereum. Regulatory recognition through an ETF is the next step that will provide the much-needed confidence to elevate the status of crypto assets as mainstream assets. 


Ethereum 2.0 

Whether the current price upswing can be sustained will largely depend on the wider crypto market. If Bitcoin retains its value without violent dips, Ethereum may make another attempt to break its prior all-time high. One major protocol implementation that will make or break Ethereum is the much-anticipated merger. 

DeFi and the Non-Fungible Token (NFT) industry have yet to realize their full potential. Most of the DeFi and NFT projects sit on the Ethereum blockchain. These industries will drive more value and utility to Ethereum’s native token. 

Many market commentators believe that Ether will likely see a similar surge as Bitcoin did in 2017 that saw the crypto asset grow from $1,000 to $20,000 in a short span of a few months.   

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Chung Yee

Chung Yee has a legal background and has been involved in research works for the legal and compliance industry. Writing is his passion, centered on topics such as the blockchain and finance.