Ethereum price increased by 13.5% between January 10 and January 12, surpassing $2,650 for the first time since May 2022. The rally’s most important factor was the approval of spot Bitcoin exchange-traded funds. However, the leading cryptocurrency experienced a 2% decrease during the same period. Investors are now discussing whether Ethereum has the qualities necessary to maintain its current market value of $322 billion.
Ethereum and the Possibility of Spot ETFs
In the past 60 days, Ethereum’s price has increased by 27%, outperforming Bitcoin’s 24% rise in the same period and considering that the approval of spot Bitcoin ETFs is intended for a brand new customer group without direct cryptocurrency acquisition, it is quite successful. Moreover, Bloomberg ETF analysts give a 70% chance of Ethereum ETF products being approved by May.
BlackRock, Fidelity, Grayscale, VanEck, and other asset managers are waiting for the U.S. Securities and Exchange Commission to set a final deadline for the Ethereum ETF decision by May 23, but some analysts believe the final answer could come sooner than expected given the procedures already in place on Bitcoin’s side.
Considering the significant price impact of the spot Bitcoin ETF approval, it could be concluded that Ethereum’s upward momentum is driven by other factors. Ethereum’s competitors faced a correction after an impressive rally period. In the last week, BNB fell by 2%, while Solana dropped by 3%.
Ethereum Leads Among Layer-1 Projects
Solana has seen a decrease in momentum for SOL after highly successful SPL token airdrops, including JITO, BONK, and WIF, experienced drops of 40% and more. Additionally, a significant portion of activity gains in decentralized applications (DApps) seemed to be concentrated in many projects that will soon launch tokens, which faded after the relevant snapshots. Consequently, investors’ appetite for Solana began to wane.
BNB achieved an impressive and unexpected rise of 35.7% between December 17 and December 27, but the increase in momentum was not accompanied by network activity. According to blockchain data analysis platform DappRadar, in the last week, active DApp addresses on the BNB Chain decreased by 61%, while the number of transactions fell by 64%. By comparison, Ethereum faced a 2.2% decrease in active addresses and a 0.3% lower volume during the same period.
Regardless of the pressure on NFT markets compared to their 2021 peak, the Ethereum network continues to lead in market value, including the leading collections. Popular NFT collections such as CryptoPunks, Bored Ape Yacht Club, Pudgy Penguins, and Azuki are leading the way, with DeFi applications and NFT investors currently enjoying the Ethereum network with an average transaction fee of $6.30.
