Ethereum Outpaces Bitcoin as Speculations on Ethereum ETF Rise

Bloomberg Reports Ethereum Achieved Greater Growth than Bitcoin this Year Due to Speculation of a Potential ETF for ETH.

Bloomberg Ethereum Surpasses Bitcoin as Institutions Pivot to Top Altcoin

📷 David Pokima

Last updated: February 21, 2024 11:19 EST | 2 min read

📷 Bloomberg: Ethereum Outpaces Bitcoin as Institutions Shift Focus to the Largest Altcoin

According to Bloomberg, Ethereum has recorded higher growth than Bitcoin this year, thanks to speculations regarding a possible spot Ethereum ETF.

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Ethereum Takes the Lead

Ethereum has been gaining positive traction year-to-date (YTD) and outperforming Bitcoin in terms of growth. Unlike previous time frames where Bitcoin led the way, Ethereum has soared 28% this year, while Bitcoin has climbed 21%. Last year, Bitcoin saw a 158% growth, fueled by renewed institutional inflow, while Ethereum trailed behind with an 80% increase.

The Recent Surge

Currently trading at $2,918, Ethereum has witnessed a 6% rise in the last seven days and an 18% growth compared to the previous month. On February 20, the asset even breached the $3,000 mark before experiencing a slight market correction in early trading hours.

This surge takes Ethereum to its highest point since April 2022, before the downfall of the Terra Network and the subsequent implosion of FTX. The bear market caused by industry events and broader macroeconomic factors led to a significant decrease in the values of Bitcoin and Ethereum in 2022, with both cryptocurrencies slipping by more than 55%.

Ethereum ETF Speculations

Analysts and experts predict a change in direction for Ethereum with the possible approval of a spot Ethereum ETF by the United States Securities and Exchange Commission (SEC). This follows the success of Bitcoin ETFs, which led to significant inflows into the leading cryptocurrency.

As big firms, such as BlackRock, applied for a Bitcoin ETF license, it attracted higher institutional interest. In the last quarter of 2023, BTC saw millions of dollars flowing into investment products, driving its price above $42,000 in December.

As investors seek new investment opportunities, they have now turned their attention to an Ethereum ETF. Several firms have filed applications with the SEC, hoping for approval. However, some remain skeptical, anticipating potential legal hurdles.

Traders are optimistic about Ethereum’s potential due to its staking feature, which allows investors to earn yield. Additionally, the growing smart contracts ecosystem on the Ethereum blockchain fuels positive sentiment towards the altcoin. Stefan von Haenisch, the head of trading at OSL SG Pte Singapore, projects that Ethereum will outperform Bitcoin in the coming months, at least until the potential ETF approval in April-May.

While there are concerns that the SEC may not approve an Ethereum ETF due to its tough stance, there is still optimism surrounding institutional flows into Ethereum based on the filed ETF applications.

Q&A: Addressing Additional Topics

1. What is an ETF? An ETF (Exchange-Traded Fund) is a financial product that tracks the performance of an underlying asset or a group of assets. It allows investors to gain exposure to a particular asset or sector without directly owning the asset itself.

2. What is staking on the Ethereum blockchain? Staking on the Ethereum blockchain involves holding and “staking” a certain amount of Ether (the cryptocurrency of the Ethereum network) to support the network’s security and operations. In return, stakers earn rewards, similar to earning interest on a traditional investment.

3. Why is the SEC hesitant about approving an Ethereum ETF? The SEC has historically been cautious about approving ETFs for cryptocurrencies. They have concerns about potential market manipulation, price volatility, and investor protection. However, the growing interest from institutional investors and the success of Bitcoin ETFs may influence their decision-making process.

The Future Outlook

As Ethereum continues to outpace Bitcoin in terms of growth, there is a strong indication of increased institutional interest in the altcoin. If an Ethereum ETF is approved, it could attract significant inflows and further boost the price of Ethereum.

Investors should closely monitor the regulatory developments surrounding an Ethereum ETF and consider its potential impact on the cryptocurrency market. Additionally, the expanding use cases and growing adoption of Ethereum’s smart contract technology make it an intriguing long-term investment opportunity.

As always, it’s essential to conduct thorough research and consult with financial advisors before making any investment decisions.

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References:

1. Bloomberg: Ethereum Outpaces Bitcoin as Institutions Shift Focus to the Largest Altcoin
2. FTX Super Bowl Ad Goes Viral
3. All Systems Go: Bloomberg Terminal Populates 11 Proposed BTC ETFs
4. Crypto Asset Management Surged 14%, Daily Trading Volumes Recorded 33% Increase in December
5. FTX Debtors Release Estimated Values of Cryptocurrency Claims, Bitcoin Priced at $16,871 Per Coin
6. Fidelity Bitcoin ETF Rakes in Reported $208M, Offsetting Grayscale Outflows Alone

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