Key Points
- Ethereum (ETH) is experiencing a significant increase in value, largely due to the growing adoption of digital assets and web3 protocols.
- The Ethereum network is preparing for high-impact events and network upgrades that could trigger a parabolic rally beyond ETH’s all-time high.
Ethereum (ETH), the dominant layer-one (L1) blockchain with a significant stake in the stablecoins market and over $54 billion in Total Value Locked (TVL), is reaping the benefits of the widespread adoption of digital assets and web3 protocols.
Its price has surged by approximately 71 percent in recent weeks, trading around $3,794 as of Thursday’s early London session.
Ethereum’s Bull Run
The price increase suggests that Ethereum is in the early stages of a macro bull run, with further gains expected in the near future.
Ethereum’s smart contracts and layer two (L2) scaling solutions have become a dominant force in the web3 industry.
The Ethereum core developers, led by co-founder Vitalik Buterin, are working on both the settlement and consensus layers to ensure widespread acceptance of ETH.
However, Ethereum faces stiff competition from other layer-one blockchains, such as Solana (SOL), Cardano (ADA), and BSC, among others.
In the near term, the Ethereum network is gearing up for high-impact events that could potentially trigger a parabolic rally beyond ETH’s all-time high.
US Ethereum ETF Debate
The approval of several spot Bitcoin ETFs in the United States earlier this year has had a positive impact on the crypto market.
Billions of dollars have flowed into Bitcoin investment products, leading to a significant imbalance in demand versus supply.
The success of the spot Bitcoin ETFs has sparked optimism for the potential approval of spot Ethereum ETFs in the United States.
The same fund managers who applied for and received approval to offer spot Bitcoin ETFs, led by BlackRock Inc (NYSE: BLK), are now vying to offer spot Ether ETFs.
The same factors that led to the approval of spot Bitcoin ETFs, including court and legal pressure, could influence the approval of spot Ether ETFs.
Upcoming Network Upgrade
Following the successful transition from the proof-of-work (PoW) consensus method to the proof-of-stake (PoS) method through the merge event and the Shanghai upgrade, the Ethereum network is now preparing for the next significant upgrade.
The Dencun upgrade, slated for activation on the mainnet on March 13, 2024, has undergone extensive testing over the past year to ensure smooth integration.
The Dencun upgrade will introduce several changes, the most notable being the introduction of ephemeral data blobs with EIP-4844, via proto-danksharding, which will help lower L2 transaction fees.
Despite the growth in the Ethereum network, some experts remain skeptical about the approval of the spot Ethereum ETFs.
Eric Balchunas, a senior ETF analyst at Bloomberg, believes that the Ethereum network cannot be compared to the Bitcoin network in terms of institutional adoption.
Ben Caselin, CMO of VALR cryptocurrency exchange, echoed these sentiments, suggesting that the Ethereum network could be dethroned due to its high transaction costs during network congestion.