DeFi
Ethereum’s Potential Upside Surprises: Coinbase Report
Coinbase predicts that Ethereum (ETH) could soon eclipse other cryptocurrencies.
Company news report suggests that the second largest cryptocurrency has the potential to positively surprise its holders.
Key Factors Supporting Ethereum’s Potential
This year, Ethereum is lagging behind the broader crypto market. Despite this underperformance, Coinbase remains optimistic about its long-term prospects. The report highlights ETH’s 29% year-to-date increase, positioning it well due to the absence of significant supply-side pressures such as token unlocking or selling of minors.
Coinbase Analyst David Han points out that ETH benefits from large and growing liquidity pits. Staking, in which investors stake tokens to support the network and earn rewards, has been a major factor. Additionally, layer 2 solutions, which scale Ethereum by processing transactions off the main blockchain, have grown significantly.
Learn more: 9 Best Places to Bet on Ethereum in 2024
Active ETH supply. Source: Coinbase
The expert also notes the growing institutional interest. As more financial institutions explore blockchain technology and decentralized finance (Challenge), Ethereum, the backbone of most Challenge applications, significant advantages. The versatility and infrastructure of the platform make it a preferred choice for both developers and investors.
The impact of the potential launch of Spot ETFs
The potential launch of Ethereum spot exchange-traded funds (ETFs) in the United States could significantly impact the asset’s market position, increase liquidity, and potentially drive up its price. Although the SEC recently alluded to a possible refusalthis simple prospect has already aroused market enthusiasm.
Scott Johnsson of Davis Polk and Wardwell highlighted the SEC’s call for public input on the classification of BlackRock’s proposed spot. Ethereum ETF as a commodity-based trust. Johnsson suggested that refusing ETFs could be strategic, as they could be misclassified as commodity-based trust stocks.
“We think the market may be underestimating the timing and chances of eventual approval, leaving room for positive surprises,” Han said.
Learn more: How to invest in Ethereum ETFs?
Regardless of how the US ETF story ends, Coinbase’s report suggests that Ethereum will outperform in the months to come. Strong demand drivers and technological innovations help ETH remain a key asset to watch.
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