Ether (ETH) has reached a milestone by surpassing the $4,000 mark for the first time since December 2021. The price of ETH rose from $3,873 on March 8, experiencing a 4% increase in the past 24 hours and a 74% gain year-to-date. On Bitstamp, it reached a 27-month high of $4,003, according to CoinMarketCap data.
The surge in Ether’s price can be attributed to two key factors. Firstly, Ethereum’s upcoming Dencun update, which is expected to bring significant improvements to the network. This update will incorporate several Ethereum Improvement Proposals (EIPs), including EIP-4844, which introduces a feature called “proto-danksharding.” Proto-danksharding allows the blockchain to use blobs, streamlining the transaction process by storing some data off the blockchain. This will result in faster transactions and reduced costs for layer-2 chains and rollups that rely on Ethereum. The Dencun mainnet is set to go live on March 13.
The second factor driving ETH’s price growth is the anticipation of the United States Securities and Exchange Commission (SEC) approving a spot Ether exchange-traded fund (ETF). Despite the SEC delaying its decision on spot Ethereum ETF applications from BlackRock and Fidelity, market participants remain optimistic that approval will be granted soon. The SEC is expected to make a decision on all spot Ether ETF applications on the same day, following a similar approach taken with Bitcoin ETFs on January 10. The deadline for the SEC to approve or deny an Ether ETF is May 23.
Drawing from the success of spot Bitcoin ETFs since their launch on January 11, it is predicted that a spot Ether ETF product will have a similar impact, attracting more capital into the second-largest cryptocurrency by market capitalization. Institutional investors may increase their exposure to Ether, diverting attention from Bitcoin’s recent all-time high. Siddharth Lalwani, the co-founder and CEO of Range Protocol, believes this shift in focus will benefit Ether.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment or trading decisions.