Ethereum ETH Expected to Reach 10k This Cycle and Surpass Bitcoin ETFs to Serve as the Driving Force
The recent approval of Ethereum (ETH) spot exchange-traded funds (ETFs) in the United States has generated a wave of optimism among cryptocurrency enthusiasts and investors. These ETFs, which can directly hold ETH, are anticipated to draw in substantial inflows, with estimates suggesting they could reach $4 billion in the first five months of trading.
K33 Research, a crypto analytics firm, has forecasted this figure by comparing the assets under management in existing ETH-based exchange-traded products globally with similar Bitcoin (BTC) products. The firm also took into account the amount of open interest in futures contracts on the Chicago Mercantile Exchange, a crucial indicator of institutional demand.
As the ETH ETFs get ready to launch, many analysts are predicting that Ethereum may outperform Bitcoin in the second half of this market cycle. This positive outlook is due to several factors, including lower operating costs for ETH validators compared to BTC miners, token incentives that result in less potential selling pressure, and a token burn mechanism introduced with the implementation of EIP-1559.
Another bullish factor for ETH is the significant amount of the token that is “soft locked” in DeFi services or used as collateral, effectively reducing its circulating supply and potentially increasing its value. Nearly 40% of ETH is locked up in this manner.
Some analysts, such as Jelle from CryptoJelleNL, have suggested that if ETH can surpass the $4,000 mark, it could potentially rally to $10,000. This prediction is based on the recent breakout from a multi-month falling wedge pattern and the successful reclaiming of key support levels.
The approved ETH ETFs will not include staking rewards, a decision likely made to appease regulators. While some have expressed concerns that this omission might lead to lower demand, K33 Research disagrees, pointing out that most assets in Canadian and European ETH ETFs are held in non-staked funds.
