Ethereum
Punters put 79% odds on Ethereum, all-time high, even as ETF approval odds decline – DL News
- Ethereum has a four in five chance of hitting a new high in 2024, according to Polymarket bettors.
- At the same time, hopes of analysts and online punters for the approval of the Ethereum ETF are dwindling.
- So what’s causing this surge?
Online bettors put the chances of Ethereum breaking a record this year at 79%, according to a bet on the Polymarket crypto prediction platform. This is up from 31% in mid-February.
Still, punters and analysts put little odds on the Securities and Exchange Commission approving an Ethereum spot exchange-traded fund.
The deadline for an SEC decision on VanEck’s request is May 23.
Punters on Polymarket give a place Ethereum ETF A 31% chance to be approved, compared to 82% at the beginning of January.
“I understand all the reasons why they should approve it – and we personally think they should – but all the signs/sources that made us optimistic. [two and a half months] the Bitcoin spots are not there this time”, Eric Balchunas said in a post on X.
He and his fellow Bloomberg Intelligence analyst James Seyffart revised his chances of approval to 35% on Monday, up from 70% in February.
The hope is that if and when Ethereum spot ETFs are approved, they will give the asset similar growth to what Bitcoin had through ETFs in January.
The news comes as Bitcoin hits a new all-time high of $71,000 Monday, many are wondering if Ethereum will follow suit.
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Ethereum hit a yearly high above $4,070 on Monday and is up more than 60% in the past 30 days.
Ethereum hit a record high of $4,878 in November 2021.
Analysts have identified several key factors that could propel it to new heights.
They include broad optimism, supply dynamics, and the upcoming Dencun upgrade.
Supply constraints
Another tailwind for Ethereum: its diminishing supply due to tokens being blocked for staking, said Pratik Kala, senior digital asset investment analyst at crypto fund manager DigitalX. DL News Monday.
“Lesser supply is always bullish,” Pratik said. “This also indicates strong demand from long-term investors to buy/hold/stake ETH rather than using it for short-term speculation.”
Staking in Ethereum parallels Bitcoin mining by generating additional tokens, verifying transactions, and protecting the blockchain.
Locking tokens for staking effectively means removing them from the circulating supply, which may result in a decrease in the overall available supply.
According to the blockchain explorer, approximately 26% of Ethereum’s estimated circulating supply, or more than 120 million tokens, is locked. beaconcha.in.
Dencun upgrade
investment bank J.P. Morgan and spot Bitcoin ETF provider Shades of grey are among those who identified the Dencun upgrade as a catalyst for Ethereum.
The upgrade, scheduled for Wednesday UK time, is designed to improve scalability and reduce transaction fees on layer 2 platforms.
“With Layer 2 solutions built on Ethereum, blockchain becomes the settlement layer for an entirely new digital infrastructure encompassing gaming, commerce and investment,” said Eugene Cheung, Head of Institutions at Bybit. DL News earlier in March.
“The value of all of this will tend to accumulate on the ETH asset.”
Correction: A previous headline incorrectly stated Polymarket’s chances of an Ethereum record at 56%. It has been corrected to 79%.
Sebastian Sinclair is markets correspondent for DL News. Do you have any advice? Contact Seb at sebastian@dlnews.com.