- Ethereum has struggled to keep up with Bitcoin.
- It currently trades around 40% below its 2024 high.
- However, analysts point to three factors that could change its fortunes.
Ethereum shows signs of finally getting out of its funk.
While the world’s second-biggest cryptocurrency is trading almost 40% below its March high, Ether may be about to reach as high as $10,000 in the coming months.
Standard Chartered made that prediction in a recent research note as the cryptocurrency drags behind Bitcoin, which trades just 5% below its record $73,800 high from March.
However, three big factors suggest that things may be about to change.
The US election
Analysts expect the US election next week to trigger a new crypto rally as both candidates have made pro-crypto overtures.
However, a win by Donald Trump is seen as more bullish than a Kamala Harris victory as the former president is viewed as more aligned with the industry.
Geoffrey Kendrick, global head of digital assets research at Standard Chartered, said he expected Ether to jump some 300% to $10,000 by the end of next year if Trump recaptures the White House.
A win by Harris would see a less dramatic rise to $7,000, he predicted.
Ethereum futures
Ethereum futures offer another bullish sign, analysts say.
Futures are a kind of speculative investment contracts that allow people to trade on the future price of an asset.
ShayanBTC, a pseudonymous contributor at data firm CryptoQuant, notes that futures traders’ sentiment is getting bullish, according to the Ether funding rate metric, which measures the aggression of buyers versus sellers in the futures market.
If that metric is positive, then traders’ outlook is bullish. The opposite applies if the metric is negative.
“Currently, the funding rates are in positive territory with a slight upward trend, indicating that futures traders have shifted towards a more optimistic outlook on Ethereum,” ShayanBTC said in a recent note.
They cautioned that while things are looking up, those rates have not “reached the intensity required to fuel a significant breakout.”
Institutional uptick
US spot Ethereum exchange-traded funds have so far failed to grab traders to the same extent as Bitcoin ETFs.
The investment vehicles enable traders to buy exposure to the asset through asset managers and brokerages without the need to venture into the realm of crypto exchanges and self-custody.
Since launching in January, spot Bitcoin ETFs have seen total net inflows of over $24 billion, according to SoSoValue. Since launching in July, Ethereum ETFs have seen total net outflows of over $480 million.
Shauli Rejwan, managing partner at Masterkey.VC, suggests that Wall Street interest could pick up in the coming months.
“We’ll start seeing Wall Street interest materialise in roughly six to 10 months,” he told DL News. “Or maybe the bull run will accelerate their decision.”
Is Ether overvalued?
Others are not as bullish.
CoinShares analyst Matthew Kimmell argues that Ethereum is overvalued in a recent blog.
The March Dencun upgrade made layer 2 settlements significantly cheaper, but it also reduced the fees users pay to use the main blockchain, Kimmell says.
CoinShares previously predicted that the price of Ether could reach over $8,000 in five years time. Yet, the unexpected drop in fees has rendered that estimate “a miserable over calculation,” Kimmell wrote.
Crypto market movers
- Bitcoin is down 2.7% over the past 24 hours to $70,245.
- Ethereum is down 3.7% to trade at $2,535.
What we’re reading
- Can the $12bn rollup token market break its 2024 slump? — DL News
- The top 5 beta plays on Solana — Milk Road
- If Trump Wins, Could Crypto Get Hester Peirce as SEC Chair? — Unchained
- I went to meet the ‘real’ Satoshi Nakamoto in London. It was… revealing — DL News
- Your guide to the crypto market — Milk Road
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
