Ethereum
Why is Ethereum increasing? – Forbes Advisor
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The price of Ethereum (ETH) rose above $2,400 again this morning, up almost 8% in the last 24 hours.
ETH soared today as traders hope that the possible approval of a spot Bitcoin ETF will also pave the way for spot Ethereum ETFs.
The assumption is that a November filing for an Ethereum ETF from investment giant BlackRock could easily gain approval from the Securities and Exchange Commission once a Bitcoin ETF is approved.
Ethereum has been in a steady uptrend since October, when it appears to have bottomed around $1,500.
However, even with this morning’s gains, Ethereum is still worth less than half of its all-time high of nearly $4,900 set in November 2021.
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Why is Ethereum rising today?
ETH soared in November due to a filing in the state of Delaware, where an entity known as BlackRock Advisors filed for an iShares Ethereum Trust with the SEC.
The immediate assumption was that this deposit came from none other than investment giant BlackRock, which sparked considerable enthusiasm in both the Ethereum and broader crypto markets, immediately sending ETH higher.
This hope was subsequently confirmed and ETH has since maintained a steady upward trajectory.
However, the cryptocurrency has been on a roller coaster ride over the past few months as investors’ hopes that a Bitcoin ETF is close to approval are repeatedly dashed. However, it is now speculated that a spot Bitcoin ETF could be approved as early as this afternoon.
Currently, the only Bitcoin ETFs approved for trading by the SEC are Bitcoin Futures ETF. These ETFs trade Bitcoin Futures Contracts rather than the actual current price of Bitcoin, which a spot ETF would trade.
Futures contracts are complex derivative instruments that can only be traded by experienced investors.
Is crypto winter over?
It’s starting to look like 2022 crypto winter is officially over. However, this does not mean that the crypto market has not maintained its volatility.
Yesterday afternoon, the SEC’s account on X, formerly Twitter, announced that the agency had approved Bitcoin spot ETFs.
This statement was immediately retracted by the SEC which claimed that his account had been “compromised”. The combination of this news caused the price of Bitcoin to rise and then fall.
Today, Bitcoin is down more than 3%.
What does Ethereum’s rebound mean for investors?
Investors now face a crucial question: is this another indication that the crypto market has bottomed, or is it just a temporary rebound, often referred to as a dead cat bounce ?
A dead cat bounce refers to a temporary price recovery within a broader negative trend, followed by a resumption of downward movement.
It certainly doesn’t seem like it at the moment, but with the volatility the crypto market has seen over the past few years, not to mention months and days, one can never be sure.
Although Ethereum’s steady upward trajectory since October has offered some relief to investors, the truth is that investors are currently navigating uncharted territory in various aspects. These include the geopolitical landscape, economic indicators, cryptocurrency regulation, and the Federal Reserve’s stance on interest rates.
Those familiar with the industry understand that even during the most favorable times, it is almost impossible to accurately predict short-term price movements of digital assets. This is especially true in today’s market environment.
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