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Bitcoins’ nearest rival Ethereum has gained significant attention after the surge which was due to the speculation regarding US ETF.
Ethereum (ETH) started the year with impressive gains, and in early April, it gained attention by posting its largest increase in over a month. This surge was due to speculation regarding the prospects of applications for US exchange-traded funds for the token.
Happy Tuesday For Ethereum Investors
Ether’s year-to-date gain of 62% is nearing the 68% increase of market leader Bitcoin.
According to Edward Chin, co-founder of digital-asset hedge fund Parataxis Capital, there has been some discussion about Ether ETF issuers meeting with the US Securities and Exchange Commission.
In January, a skeptical SEC reluctantly allowed US spot-Bitcoin ETFs after a court reversal last year. The ETFs have since accumulated $59 Billion in assets, making it one of the most successful debuts ever for a fund category. This helped lift Bitcoin to a record high in mid-March.
Traders anticipate an Ether rally if the SEC allows ETFs that directly hold the token. Investment powerhouses like BlackRock Inc. and Fidelity Investments have submitted applications to start such funds. However, there are doubts over whether the regulator will give the green light.
SEC Still Claims Ethereum As An Unregistered Security
While Bitcoin is regarded as a commodity, the SEC claims that most other tokens are essentially unregistered securities. Therefore, the SEC considers the digital asset sector to be rife with non-compliance.
The SEC’s approval of spot Bitcoin portfolios also relied on the correlation between CME Bitcoin futures and price movements in the digital asset itself, which was deemed sufficient to allow for the detection of fraud and manipulation.
Bloomberg Intelligence ETF analysts James Seyffart and Eric Balchunas assigned 75% odds to the prospect of the agency rejecting Ether applications by May. They said the SEC may lean on data “showing relatively weak correlations between spot and futures markets.”
Challenges For Ethereum
The Ethereum network has been facing scaling challenges on its primary layer due to the growing user base and application field.
Moreover, high gas fees and network congestion have highlighted the current infrastructure’s limitations. These limitations are making it necessary to have efficient L2 solutions.
Developers find L2 networks attractive because they ease the burden on the mainnet and offer faster transactions and lower fees, making them a viable alternative.
These are poised to be the breeding ground for innovation and the go-to space for new projects in DeFi, NFTs, and beyond.
Vitalik Buterin’s New Roadmap
Vitalik Buterin’s new roadmap underscores this transition, with key updates including the solidification of single slot finality (SSF) in post-merge proof of stake (PoS) improvements, which aim to enhance the efficiency and security of the network.
Buterin has emphasized the significance of developing cross-rollup standards and interoperability in the long run. This will facilitate seamless communication and execution of transactions across various L2 solutions, thus enhancing the ecosystem’s composability.
Continuous improvement is evident in further developments, such as the redesign of The Scourge, the readiness of Verkle trees for inclusion, and the shrinking of “state expiry” to reflect a broader consensus.
Summary
After starting the year with a gain of over 6%, ETH is once again in the headlines as it is trading near its nearest rival BTC. The SEC, however, treats ETH as just an unregistered speculative asset. Crypto enthusiasts are speculating regarding the US ETF which is causing significant gains in ETH price.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos or related indexes comes with a risk of financial loss.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
