Analysts from Bernstein foresee a high likelihood of a spot Ethereum ETF approval within the next year. Ethereum’s price was near $3,000 on February 19, driven by anticipation of the Spot ETH ETF.
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Ethereum Price nears $3K in anticipation of the Spot ETH ETF
ETH was trading at $2,911 with a market cap of $349.84 billion. This growth is significantly higher than Bitcoin’s 0.4% gain and the overall crypto market’s 1.2% increase during the same period.
Lido Staked Ether (STETH) also saw a 3.88% increase over 24 hours, while Ethereum 2.0 staking tokens as a whole recorded a 5.4% gain, according to CoinGecko. Despite the price rise, Ethereum contributed only a small portion to the 24-hour liquidations, accounting for $35.48 million, including $8.43 million in long liquidations and $27.05 million in short liquidations.
Lido Staked ETH
Spot ETH ETF Approval: The driving force behind the surge
The recent surge in Ethereum’s price is possibly linked to expectations of the US Securities and Exchange Commission (SEC) approving a spot Ethereum exchange-traded fund (ETF).
Although no significant regulatory developments were reported, a Bernstein report suggesting a 50% chance of an ETF approval by May and near-certain approval within a year has been widely discussed. This, along with similar predictions in previous months, may have influenced investor sentiment and market activity.
BTW, Ethereum is fundamentally incompatible with an ETF.
— Thomas | heyapollo.com (@thomas_fahrer) February 18, 2024
Proof of Stake Txn validation & coins held with a centralised custodian doesn't work.
Coinbase would control the entire network.
The only reason to approve an ETH ETF is if the SEC wanted to destroy Ethereum 🤷
However, concerns have been raised regarding Ethereum’s ETF prospects, with Apollo co-founder Thomas Fahrer suggesting that Coinbase’s role as an ETF custodian could compromise Ethereum’s proof-of-stake model.
Coinbase ETH Staking
Coinbase currently accounts for about 15% of all ETH staking, while Lido, another staking platform, is responsible for over 31%. It remains uncertain whether the SEC will allow the staking of ETH held in spot Ethereum ETFs.
In addition to ETF expectations, there is anticipation surrounding Ethereum’s Dencun upgrade scheduled for March 13. This upgrade will introduce proto-dank sharding, a feature expected to enhance ETH transaction costs and scalability.
Conclusion
To conclude, the anticipation of a spot Ethereum ETF approval has driven Ethereum’s price close to $3,000, reflecting investor optimism. Despite concerns over ETF prospects, the upcoming Dencun upgrade adds to the excitement, highlighting the ongoing evolution and potential of the Ethereum ecosystem.
Note: It’s a research based article not a financial advice
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