Top 3 Reasons Ethereum Is Poised for a Major Surge Soon

By Aaron Feuerstein February 02, 2024 In Ethereum
Source: Adobe Stock
  • The Dencun upgrade is aimed at boosting Ethereum’s efficiency and scalability and is set for a final testnet deployment on Holesky on February 7, ahead of its mainnet release.
  • Amidst increasing news about Ethereum Spot ETFs, there’s divided opinion on how things will play out.
  • Post-Bitcoin halving, funds often rotate from Bitcoin to other cryptocurrencies, spurring growth in the wider ecosystem.
  • Geoff Kendrick of Standard Chartered concurs with Michaël van de Poppe’s prediction of Ether reaching USD $4,000 by May 23.

CEO & founder of MN Trading Consultancy and avid crypto trader, Michaël van de Poppe, believes Ethereum (ETH) is poised to hit USD $4,000 (AUD $6,000) over the coming months. There are three events he believes are most likely to positively contribute to the price of ETH: the Dencun upgrade, speculation around a potential Ether ETF approval and the Bitcoin Halving. Let’s look at each of these in a little more detail.

Dencun Upgrade In February

This is the biggest upgrade for the Ethereum network slated for 2024, the Dencun upgrade. The Dencun upgrade on Ethereum’s Sepolia testnet occurred on Thursday and was finalised within about 20 minutes.

The upgrade, set to be Ethereum’s most significant update since last March’s Shapella upgrade, includes key enhancements like proto-danksharding for better data handling, improved smart contracts, less external dependence, enhanced validator management, and efficient blob fee structures. This major hard fork aims to boost Ethereum’s execution efficiency and data availability, advancing towards addressing scalability issues and laying groundwork for future full sharding.

The final testnet, Holesky will be live on February 7 – after that we’ll have to wait for the mainnet release.

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Ethereum Spot ETF: Copying Bitcoin’s Hype?

While Bitcoin had its fair share of news, hype and speculation around Spot Exchange Traded Funds (ETFs), anyone closely following news in the crypto sector probably noticed that there are more and more news stories about Spot Ethereum ETFs surfacing.

So, will we see a similar amount of hype and speculation as in Bitcoin’s case? Not to forget all the delays. Well, Standard Chartered thinks that there will be an ETF by May, others think it’s not going to happen this year, because of politics. SEC Commissioner Hester Peirce thinks it will happen and the Commission will not repeat its mistakes. We surely will see about that.

That’s not how we’re going to do our approvals … We shouldn’t need a court to tell us that our approach is ‘arbitrary and capricious’ in order for us to get it right

Hester Peirce

Funds Rotating From Bitcoin Post Halving

While the halving event reduces the reward for mining new blocks in half, it also increases Bitcoin’s value due to that reduced supply. After this increase, investors and market participants often start to explore and invest in other cryptos, leading to a broader ecosystem growth. This cycle can impact the entire crypto market, potentially driving innovation and investment in various blockchain projects.

Geoff Kendrick, head of research at Standard Chartered agrees with van de Poppe’s price prediction, saying Ether’s price could rise to USD $4,000 by May 23, aligning with Bitcoin’s trend during the ETF approval process.

His analysis suggests Ether could resist post-ETF approval sell-offs unlike Bitcoin, influenced by factors like low market sentiment for approval, incorrect implied volatility, and potential simultaneous SEC approvals. Ether’s resilience might be further supported by Grayscale’s Ethereum trust having a smaller market cap share compared to Grayscale’s Bitcoin holdings. 

These factors should make ETH less vulnerable than BTC to a post-approval selloff.

Geoff Kendrick

Aaron Feuerstein
Author

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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