The native ethereum token hit $3,000 on February 20, following a week-long rally as cash poured into various cryptocurrencies in 2024.
This was the first time since April 2022 that ethereum (eth) reached this level, reaffirming bullish sentiment towards the second-largest cryptocurrency and blockchain asset. According to CoinMarketCap, eth grew more than 2% in the last 24 hours and more than 13% in the last seven days.
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ethereum now has a market cap of over $355 million following the latest surge, representing just over 18% of the total cryptocurrency market. Year to date (YTD), eth is also up 30%.
Ether's growth has coincided with the rises of bitcoin (btc) and the overall cryptocurrency landscape. bitcoin has seen increased demand after the US SEC allowed btc spot ETFs to trade on national exchanges such as the NASDAQ and CBOE.
Some analysts noted that bitcoin ETFs are a catalyst for widespread interest in cryptocurrency markets. Data from TradingView supports this narrative, as the cryptocurrency market capitalization has expanded by almost 20% two months into the year.
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The importance of the ethereum ETF
Issuers are also looking for the same product, with eth as the underlying asset. As crypto.news reported, several issuers, from ARK 21Shares to Invesco Galaxy, have filed applications to list spot ethereum ETFs on US exchanges.
These products already exist in futures contracts, which track upcoming Ether prices rather than spot prices. The SEC has typically denied spot crypto products, citing market manipulation and fraud concerns, but Judge Neomi Rao's ruling in the Grayscale case quashed this tactic.
Judge Rao called the SEC's decision “arbitrary and capricious” and found the decision to approve and reject similar products to be inadequate in law.
Industry advocates are hopeful that the same reasoning can be applied to eth-based products, although SEC Chairman Gary Gensler has occasionally expressed a divergent opinion. Gensler has yet to categorically address whether ethereum is a security or not, but insists that the vast majority of cryptocurrencies are subject to financial rules.
Analysts predict a 50% chance that ethereum ETFs that track eth spot prices will receive regulatory approval in the second quarter of 2024.
The SEC has delayed approving or denying ethereum spot ETFs until May, while a technology update continues to fuel optimism around the cryptocurrency. eth developers aim to deploy Dencun on the mainnet before the end of March.
Dencun introduces proto-danksharding, an update to strengthen data availability for layer 2 digests. The solution will add blobs to on-chain activity and is touted to reduce gas fees, making it easier and cheaper to transact on the ethereum ecosystem.
