While the recent Bitcoin and cryptocurrency market momentum may be cooling off, Ethereum (ETH) is showing resilience and rejecting lower lows, particularly against Bitcoin (BTC). According to insights shared by decentralized finance (DeFi) researcher DefiIgnas on December 8, there are indications that ETH could be on the verge of a major rally. Should this rally materialize, Ethereum has the potential to surpass BTC as the best-performing asset.
DefiIgnas highlights that ETH currently lags behind BTC by 24% in 2023. Nevertheless, several fundamental indicators suggest that this could soon change. One significant development is the increasing interest of crypto investors in the Grayscale Ethereum Trust (GETH), which has been on a rally in recent months, outperforming Ethereum spot prices. GETH has experienced a surge of 298% in its share prices, while ETH itself has only risen by around 100% during the same period. As GETH’s share prices increase, its discount with spot ETH decreases, indirectly leading to more capital flowing into ETH and stimulating higher demand.
DEFIIgnas remains bullish on Ethereum due to several recent developments in the crypto market. One such development is the approval of the first spot Bitcoin ETF. It is widely anticipated that the Securities and Exchange Commission (SEC) will authorize multiple products, including those proposed by prominent firms like Fidelity and BlackRock. Once the spot Bitcoin ETF goes live, likely in early 2024, attention, narrative, and speculation will shift towards the approval of the first spot Ethereum ETF. BlackRock, the world’s largest asset manager, has already submitted an application with the SEC to issue the first spot Ethereum ETF.
Another factor that is expected to support Ethereum prices is the upcoming Cancun upgrade in the first half of 2024. Over the years, Ethereum has undergone multiple upgrades, including the transition from proof-of-work (PoW) to proof-of-stake (PoS) and the introduction of ETH burning through an overhauled fee auction mechanism. With the Cancun upgrade, Ethereum aims to enhance the capabilities of its mainnet by activating several proposals, including the EIP-4844 proto-dank sharding. This proposal aims to reduce gas fees associated with rollups, further bolstering Ethereum’s quest to significantly increase on-chain scalability and reduce gas fees over time.
Examining the daily candlestick arrangement, ETH appears to be firm against BTC at current spot rates. The reaction of prices in the days ahead is uncertain, but if there is confirmation of the gains observed on December 7, ETH could potentially extend its gains. In such a scenario, it could break above the current consolidation and bulls may aim to surpass the November 2023 highs of approximately 0.058 BTC.
Ethereum (ETH) is showing signs of a potential rally in the cryptocurrency market. With increasing interest in the Grayscale Ethereum Trust (GETH), the approval of the first spot Bitcoin ETF, and the upcoming Cancun upgrade, ETH has the opportunity to surpass BTC as the best-performing asset. Investors and enthusiasts will be eagerly watching for further developments and prices to confirm the possibility of an ETH breakout and extended gains.
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