US Investors Driving Ethereum Price Surge: Anticipation for Spot Ethereum ETF

New Market Analysis by CryptoQuant Reveals US Bulls as Primary Drivers of Recent Ethereum (ETH) Price Surge

US Institutional Demand Drives ETH Price Surge CryptoQuant

By David Pokima

Last updated: February 27, 2024 11:57 EST | 2 min read

United States investors’ activity has spurred growth in the cryptocurrency market, leading to ETH price hikes in recent weeks. The anticipation of spot Ethereum ETF approvals is particularly contributing to this surge.

A new market analysis from on-chain analytics firm CryptoQuant shows that United States bulls are largely responsible for the increase in the price of Ethereum (ETH). According to the firm, Coinbase Premium data reveals a surging demand from the US, causing an 11% growth for the asset. Interest in ETH tokens on Coinbase Premium was higher than usual, as the indicator showed a gap in ETH/USD and ETH/USDT on Coinbase and Binance.

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Ho Chann Chung, CryptoQuant’s Head of Marketing, explains this growth by pointing to future gains in the coming weeks. He says, “The recent ETH price action was driven by the US demand. We can see that Coinbase has triggered the upward movement with the premium index.”

Anticipation for Spot Ethereum ETF

A major reason for increased demand by United States investors is the anticipation for a spot Ethereum ETF approval by the United States Securities and Exchange Commission (SEC). Institutional investors are hopeful that such an approval would create a new investment window into the asset on the back of the recent bull cycle. In recent weeks, several firms have backed Ethereum’s growth, describing ETH as an investor favorite.

As firms eye a spot ETH ETF, significant institutional inflows have been recorded in the asset’s products. In the last seven days, $16.8 million flowed into institutional funds, raising the monthly inflow to $54.4 million. Furthermore, Ethereum’s Assets Under Management (AUM) stands at $12.5 billion, with inflows wiping out losses recorded last year.

Last year, Solana (SOL) recorded consecutive weekly gains, earning the title of the institutional investor favorite, while Ethereum posted mild outflows. However, with the recent ETH price action, this might not be the case for long.

At press time, Ethereum trades at $3,250, representing an 11% gain in the last seven days and a whopping 40% in the last month. The asset’s market capitalization has topped $389 billion, and its daily volumes have surged above 50% to $22.7 million.

Several institutions have filed for a spot Ethereum ETF, including Franklin Templeton, Fidelity Investments, VanEck, Grayscale, Hashdex, and more.

ETH Price Draws Motivation from Bitcoin

Spot Bitcoin ETFs were approved in the United States on January 10, leading to a spike in Bitcoin price and inflow into institutional funds. So far, over $5.2 billion has flowed into institutional products with projections for further growth. Bitcoin trades at $57,100, posting over 35% in gains in the last month as bulls look toward breaching new levels not seen since 2021.

The inflows into the market leader caused a rebound in the broader market. The total cryptocurrency market cap now stands at $2.15 trillion, with institutional fund AUM at $67.4 billion.

This growth has led to a renewed interest in decentralized finance (DeFi) activities as well as a surge in the total value locked (TVL) across protocols.

Q&A

Q: What is the significance of the United States investors’ activity in the cryptocurrency market?

A: United States investors’ activity is significant as it contributes to the overall growth and price hikes in the cryptocurrency market. In the case of Ethereum, their demand has led to an 11% growth in the asset’s price.

Q: Why are United States investors particularly interested in Ethereum?

A: One of the main reasons is the anticipation for a spot Ethereum ETF approval by the United States Securities and Exchange Commission (SEC). Institutional investors hope this approval will create a new investment window into the asset, fueling its growth further.

Q: How has Ethereum’s performance been compared to other cryptocurrencies?

A: Last year, Ethereum experienced mild outflows while Solana gained popularity among institutional investors. However, with the recent surge in Ethereum price, it is poised to regain its position as the favorite among institutional investors.

Q: What has been the impact of Bitcoin ETFs on the cryptocurrency market?

A: The approval of spot Bitcoin ETFs in the United States caused a spike in Bitcoin price and inflows into institutional funds. This, in turn, led to a broader market rebound, with renewed interest in decentralized finance activities.

Future Outlook

Based on the current trends and institutional interest, Ethereum’s price is expected to continue its upward trajectory. The anticipation for a spot Ethereum ETF approval will likely drive further demand, especially from United States investors. As the cryptocurrency market continues to mature, more institutional inflows are expected, which will contribute to the overall growth of this asset class.

Investors should closely monitor the regulatory developments surrounding spot Ethereum ETF approvals and consider allocating a portion of their portfolio to Ethereum. However, as with any investment, it is important to conduct thorough research and seek professional advice to make informed decisions.

References

1. CryptoQuant: US Institutional Demand Led to Ethereum ETH Price Surge

2. Solana Price Prediction: SOL Bounces Back From $100, Could SOL Reach $1000 in 2024?

3. Ethereum Price Prediction: Eyes on $2700 as Spike Indicates New Rally Brewing

4. US SEC Clears Dealer Rule Expansion for ROPE and DeFi

5. Follow Us on Google News

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