5 Reasons Why Ethereum Is Growing

The second largest cryptocurrency by capitalization, Ethereum, has become the center of attention of the crypto community. Many investors are expecting the coin to grow rapidly.

5 Reasons Why Ethereum Will Continue to Grow

1. Launch of Spot Ethereum ETFs

Spot ETF trading on Ethereum in the US may start on July 23, 2024. The instrument democratizes access to cryptocurrency investments, which means it can support the growth of Ether due to the influx of buyers.

Analysts at K33 Research are confident that the second largest cryptocurrency by capitalization will become more profitable than Bitcoin against the backdrop of the launch of spot ETFs. The experts based their point of view on the assumption that the start of trading in the instrument will be a catalyst for Ether’s growth.

The Galaxy Digital team, in turn, predicts that ETH-ETFs will attract $7.5 billion in the first six months. According to their calculations, the inflow into Ethereum funds will amount to 20% to 50% of the investment volume in Bitcoin ETFs.

2. Decrease in availability of ETH

Ethereum is not enough for everyone who wants to invest in cryptocurrency. To this conclusion Analyst Leon Weidman arrived.

ETH exchange balance and amount of ETH locked in smart contracts. Source: GlassNode

Against the backdrop of Ethereum’s move to Proof-of-Stake (PoS), developers have taken a course to reduce the emission of cryptocurrency through regular burnings.

3. Legal status of Ethereum

In June 2024, the U.S. Securities and Exchange Commission (SEC) suspended its investigation into Ethereum software developer Consensus. The commissioners had been looking for signs of an illegally issued security in Ether, but they failed. The end of the investigation increased the chances of a spot Ethereum ETF launch in the U.S. and also opened the door for other crypto project teams that had faced similar SEC claims to escape the regulator’s pressure.

4. Technical superiority

The Ethereum team regularly works on improving the technical part of the project. Crypto community members point out that the developers’ efforts are bearing fruit. For example, it has become cheaper to conduct transactions on Ethereum than on Solana, which the project’s representatives immodestly call the “Ethereum killer.”

5. General bullish trend

In April 2024, the fourth halving took place in the network of the most capitalized cryptocurrency Bitcoin. The event, as observations show, launches a new growth cycle, during which BTC can update the absolute maximum of its value. Following the flagship, altcoins, including Ethereum, are also growing.

Since Ethereum often follows BTC’s positive movements, it can be assumed that history will repeat itself this time.

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