- Since the start of the year, the price of ether has increased by around 25%.
- “Net deflationary supply” and “network revenue generation” were other causes as per report.
The impending Dencun upgrade, which will boost throughput and decrease the cost of certain network transactions, may have contributed to Ethereum’s recent price increase, according to asset manager Grayscale Investments. However, many market watchers are relating the rise in prices to optimism surrounding the potential approval of a spot ether ETF.
Grayscale Research Analyst William Ogden Moore mentioned:.
“We believe that recent price performance reflects the market’s anticipation of this upgrade. Ethereum’s Dencun upgrade, scheduled for March 13th, 2024, represents a major step forward and could help Ethereum compete in terms of scalability with faster chains in the Smart Contract Platforms Crypto Sector, such as Solana.”
Multiple Factors at Play
Ethereum is the second most valuable cryptocurrency by market capitalization, and in a recent research, an analyst from Grayscale made a reasonably optimistic case for it. Since the start of the year, the price of ether has increased by around 25%.
While rivals like Solana had over 900% increase in 2023, the report adds that ether’s price underperformed relative to its genre. Since Grayscale is trying to have their Ethereum trust turned into a spot ether ETF, taking a positive attitude on Ethereum is perhaps not surprising.
Given that the U.S SEC authorized spot bitcoin ETFs, which started trading last month, the community thinks the new financial product is likely to be approved by May.
Grayscale identified “net deflationary supply” and “network revenue generation” as other causes for optimism, in addition to the forthcoming Dencun upgrade and the possibility of spot ether ETFs obtaining approval.
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