Key Points
Ethereum Surpasses $3,000 Mark
On February 20, 2024, Ethereum’s native token reached $3,000.
This followed a week-long rally where cash flowed into several cryptocurrencies.
This is the first time since April 2022 that Ethereum (ETH) has hit this level.
The move reestablishes bullish sentiment towards the second-largest crypto asset and blockchain.
According to CoinMarketCap, ETH grew more than 2% in the last 24 hours and over 13% in the past seven days.
Ethereum’s market cap now stands above $355 million after the latest increase.
This accounts for just over 18% of the total crypto market.
Year-to-date (YTD), ETH is up 30%.
The growth of Ether coincides with the rise of Bitcoin (BTC) and the overall cryptocurrency landscape.
Bitcoin has seen increased demand after the U.S. SEC allowed spot BTC ETFs to trade on national exchanges like the NASDAQ and CBOE.
Spot Bitcoin ETFs Drive Crypto Interest
Analysts attribute the broad interest in crypto markets to spot Bitcoin ETFs.
Data from TradingView supports this view, showing the crypto market cap expanding by nearly 20% two months into the year.
Issuers are also pushing for products with ETH as the underlying asset.
Several issuers, from ARK 21Shares to Invesco Galaxy, have filed applications to list spot Ethereum ETFs on U.S. exchanges.
These products already exist in futures contracts, which track future Ether prices rather than spot prices.
The SEC has typically rejected crypto spot-based products due to concerns about market manipulation and fraud.
However, Judge Neomi Rao’s ruling in the Grayscale case overturned this approach.
Judge Rao called the SEC’s decision “arbitrary and capricious”.
She found the decision to approve and deny similar products inadequate by law.
Industry proponents hope that this rationale will apply to ETH-based products.
However, SEC Chair Gary Gensler has occasionally expressed a different view.
Gensler has not definitively stated whether Ethereum is a security, but insists that most cryptocurrencies fall under financial rules.
Analysts give a 50% chance that Ethereum ETFs tracking spot ETH prices will get regulatory approval in the second quarter of 2024.
The SEC has postponed the decision to approve or deny spot Ethereum ETFs until May.
Meanwhile, a technological upgrade continues to fuel optimism around the cryptocurrency.
ETH developers plan to launch Dencun to the mainnet before the end of March.
Dencun introduces proto-danksharding, an update designed to improve data availability for layer-2 rollups.
This solution will add blobs to on-chain activity and is expected to reduce gas fees, making transactions on Ethereum’s ecosystem easier and cheaper.
