ethereum has long been the second-largest cryptocurrency by market cap. Its market capitalization is at $180 billion as we approach the second half of October 2023 (meanwhile, bitcoin‘s market capitalization is around $530 billion).
The price of ether has been stagnant since March. Sliding down to the $1,550 level last week, eth is now at par with its March exchange rate against the US dollar.
Ether is up +30% from January, but down -25% since April
After a sharp but short-lived rally in the first half of April, reaching a year-to-date high price of $2,120, Ether is now trading at a 7-month low price with two weeks left until November.
As a result of ethereum launching in 2022 with a bull run to thaw the winter crypto freeze this January, eth is up 30% year to date. It started the year trading at $1,200.
But on the 6-month chart, Ether price is down 25%, with a drop of 4.72% in the last 30 days. Investors are interested in knowing the next moves on major crypto exchanges.
Here are 6 key factors to consider for the short, medium and long term:
1. Low fees drive ether inflation (mixed)
The rapid development of the ethereum platform has made it theoretically better than ever. Merge and several Layer 2 scalability chains have made the platform faster and cheaper than ever.
But the lowest rates are mixed.
Lower gas fees could attract more users and developers to ethereum. But they are driving Ether inflation by burning fewer tokens than new eth issuances by stakers.
In the last 30 days, the supply of Ether has grown for 33,500 eth (worth $52 million). This is an inflationary headwind for the price of Ether and is a far cry from the initially deflationary effects of the merger.
2. Ether price looks good on 1-year and 5-year charts (bullish)
There is no doubt that ethereum is here to stay as the world’s leading decentralized computer. Their merger was almost too successful and too early to increase the performance capacity of the blockchain.
Whereas before there was not enough pipeline for all the oil, now there is less oil than one pipeline. But the network is ready to take on massive growth when the time is right.
Meanwhile, on the 1-year chart, Ether price has dropped to a seven-month low. It is not known for sure when it will reach the bottom, but throughout its history, we are close to the average peak-to-bottom length.
Ether looks even cheaper on the 5-year chart, with Ether falling 76% from its all-time high of $4,600 in November 2021. Additionally, eth on crypto exchanges is at its lowest level since 2018, according to data from Santiment .
This is bullish for Ether because such moves “reduce selling pressure and show investors’ long-term convictions.” Bag holders are apparently confident in the value of ethereum‘s long-term macro thesis.
3. eth staking demand has plummeted since June (bearish)
In June, the validator queue for staking Ether had 96,600 lined up to stake as validator nodes for blockchain rewards. By October, that number had fallen to just 223. That’s according Validator queue with data Beacon Chain ethereum Explorer.
The average wait time for staking eth has dropped from 45 days to one hour and fifty minutes. This is not all bad for the price. One of the reasons for the drop in betting demand is the rise of liquid betting options like Lido.
However, Lido and other liquid staking services create additional risks for ethereum.
A misconfiguration earlier this month caused 20 Lido validators to be removed from the network. The failure resulted in $30,000 in eth fines for Lido to withdraw his staked Ether.
Additionally, betting services are creating a broader target area for SEC action under an aggressive SEC regime. Therefore, the betting outlook for ethereum is currently tilted to the downside.
4. Ether price and institutional demand (bullish)
However, demand for staking on ethereum probably won’t stay low forever.
While slow to make headway in the cryptocurrency space, institutional investors are increasingly interested in on-chain btc and bitcoin spot ETFs. they are also interested in betting ether.
Tradfi Institutional Investors Like Ether to be More Energy Efficient and Greener than bitcoin with stakes validators instead of post-merge proof of work. That will be great for ethereum when Wall Street crypto-revolution-to-beat-the-us-dollar-has-suddenly-begun-heralding-bitcoin–ethereum-xrp-and-crypto-price-chaos/” data-wpel-link=”external” target=”_blank”>finally does Big moves in crypto:
“Earlier this year, legendary BlackRock CEO Larry Fink, who shocked the world when he announced a surprise change in cryptocurrencies, said he hopes bitcoin and cryptocurrencies will ‘transcend’ traditional currencies, including the US dollar, thanks to the adoption of Wall Street.
One Tradfi institution, British bank Standard Chartered, is so optimistic about these prospects that technology/crypto-token-ether-could-rise-five-fold-by-end-2026-stanchart-says-2023-10-11/” data-wpel-link=”external” target=”_blank”>recently projected Ether will grow in market value to $8,000 per 1 eth by the end of 2026.
5. Regulatory threats (bearish)
However, don’t expect a bunch of institutions to jump into betting on Ether late next week. It will still be some time before traditional financial institutions and hedge funds feel ready to take action.
A big part of this is regulatory ambiguity driven by an excessive SEC and a multitude of policymakers taking their time to understand and legislate policies for blockchain in the United States.
Meanwhile, traditional investment institutions are loathe to make big moves without being sure they won’t jeopardize their relationship with the immensely powerful Securities and Exchange Commission.
6. Ether Price Supply and Demand Economics (Bullish)
Along with its older cousin, bitcoin, ethereum and other major cryptocurrencies have an amazing multi-year track record of high ROI bull runs based on monetary policy and supply and demand.
While the Federal Reserve is committed to controlling inflation, bitcoin–ethereum-xrp-and-crypto-price-boom-to-rival-gold/” data-wpel-link=”external” target=”_blank”>could not We will be able to avoid a policy of monetary expansion to prevent the economy from slowing down.
The US central bank certainly bitcoin–ethereum-bulls-brace-to-defend-last-line-of-support-whats-next-200642681″ data-wpel-link=”external” target=”_blank”>seems prepared enter a pause in interest rates in 2024, if not a more moderate regime. That has always boosted bitcoin and Ether with macro tailwinds.
Additionally, bitcoin‘s halving cycle is about to hit another quadrennial cut in new supply this April. That, in every cycle so far, has been a major factor in precipitating bull runs in bitcoin and ethereum, as gains spread to the rest of the ecosystem in search of higher returns on investment, and altcoins take advantage of the gains. btc skirts.
The 5-year lows for eth on the crypto exchanges mentioned above are worth mentioning again in any current discussion of the supply and demand economics underlying the price of Ether.
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