In addition to ETF anticipation, the crypto community eagerly awaits Ethereum’s Dencun upgrade that is scheduled for March 13.
The price of Ethereum (ETH) soared close to the $3,000 mark on Monday, fueled by anticipation surrounding the approval of a spot Ethereum Exchange-Traded Fund (ETF) by the US Securities and Exchange Commission (SEC) and the upcoming Dencun upgrade on the mainnet.
Ethereum’s Market Performance
As of the latest data, ETH is trading at $2,912, demonstrating a 9.5% increase over the past 7 days, with a market capitalization of $349 billion. The surge in price has also had a positive impact on related assets such as Lido Staked Ether (STETH), which saw gains of 3.88% over 24 hours, and Ethereum 2.0 staking tokens, which experienced a collective increase of 5.4%, according to data from CoinGecko.
Markedly, Ethereum contributed only a relatively small portion of the 24-hour liquidations, indicating stability amidst its upward trajectory. CoinGlass data reveals that Ethereum accounted for $36.05 million of liquidations, including $13.28 million in long and $22.77 million in short liquidations.
One of the key factors driving Ethereum’s recent gains is the anticipation of the approval of a spot Ethereum ETF. Major financial institutions including BlackRock Inc (NYSE: BLK), Grayscale Investments, Franklin Templeton, Invesco, Galaxy Digital and Fidelity Investments have all submitted applications for an Ethereum ETF.
While there have been no substantial regulatory developments regarding Ethereum ETFs recently, a report from brokerage firm Bernstein predicting a 50% chance of approval by May and a near-certain approval within a year may have influenced investor sentiment and market activity.
Ethereum Spot ETF Application Sees Backlash
However, not all voices are supportive of Ethereum ETF prospects. Thomas Fahrer, co-founder of Apollo, raised concerns that Coinbase Global Inc‘s (NASDAQ: COIN) potential role as an ETF custodian could compromise Ethereum’s proof-of-stake model and exert undue control over the network.
“The only reason to approve an ETH ETF is if the SEC wanted to destroy Ethereum,” Fahrer emphasized in a post on the X platform.
BTW, Ethereum is fundamentally incompatible with an ETF.
Proof of Stake Txn validation & coins held with a centralised custodian doesn't work.
Coinbase would control the entire network.
The only reason to approve an ETH ETF is if the SEC wanted to destroy Ethereum 🤷
— Thomas | heyapollo.com (@thomas_fahrer) February 18, 2024
It is worth mentioning that despite these concerns, Coinbase currently holds about 15% of all ETH staking, while Lido, another staking platform, accounts for over 31%, according to Dune’s data. However, the extent to which these platforms might gain dominance by holding funds on behalf of ETFs remains uncertain.
Influence of Decum Upgrade on Ethereum Price
In addition to ETF anticipation, the crypto community eagerly awaits Ethereum’s Dencun upgrade, scheduled for March 13. This upgrade will introduce proto-danksharding, a feature expected to enhance ETH transaction costs and scalability.
Notably, the Dencun upgrade has been successfully deployed on three testnets, including Goerli, Sepolia, and Holesky. This demonstrates the Ethereum development community’s readiness for its implementation on the mainnet.
Finally, Ethereum’s price rise towards $3,000 reflects rising anticipation of key developments within the Ethereum ecosystem, such as the SEC’s anticipated approval of a spot ETF and the impending Dencun upgrade. While regulatory hurdles linger, investor confidence remains high, highlighting Ethereum’s status as a blockchain platform primed for future growth and innovation.
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