ALL EYES ON ETHEREUM AND ITS LAYER 2 ECOSYSTEM
The approval, launch and trading of the Bitcoin ETFs has brought about a new frenzy in the crypto market, and has ignited the next bull market. The bullish momentum has hit every aspect of the crypto space, leading to double digits gains across different coins and token in the past few weeks in 2024.
Just as every other cycle in the crypto space, after the Bitcoin bull has flexed their muscles, liquidity tends to flow to Ethereum next and then other altcoins. This cycle is no different, but it is even more peculiar because of what we are expecting in the coming days and week for the Ethereum ecosystem.
Investors and traders in the crypto market are setting their sights on the Ethereum ecosystem following scheduled events that is posed to go live on Ethereum soon and the crypto space in general.
First is the Ethereum dencun upgrade which has been scheduled to go live on the 14th of March this year. This upgrade primarily seeks to provide lasting solutions to issues surrounding Ethereum’s scalability, efficiency, and security, and ultimately reduce the gas fee on Ethereum Layer 2. This upgrade will be base on the various Ethereum Improvement Proposals (EIPs), most notably the EIP-4844 for proto-dankshading.
This upgrade will have a massive effect on the Ethereum Layer 2 ecosystem by reducing the gas fee normally charge on each transaction, which will in the long run, spur the interest and usage of this Ethereum Layer 2 and ETH.
The Ethereum chain is home to an array of a vast majority of decentralized applications and innovative projects (smart contracts, DeFi, NFTs, Depin etc), and the Ethereum’s ecosystem continues to drive unprecedented levels of use cases and activities. If this upgrade is achieved, we will see a lot of bullish ride on the Ethereum Layer 2 and the parent blockchain.
The Dencun upgrade will mark the beginning of the “The Surge” era in the Ethereum roadmap, whose aim is to make the Ethereum Layer 2 more user friendly and cheap fees in order to drive mass adoption and usage across the different sub-sectors in the crypto space.
The second event to watch out for in Ethereum crypto space in the next few weeks is the proposed Ethereum Exchange Traded Funds (ETF) application made to the United States of America’s Security and Exchange Commission. The potential approval of an Ethereum ETFs as applied by the same tradfi institutions that got the approval of a Bitcoin ETF in January 2024 is another catalyst that will drive the interest in the Ethereum ecosystem and its value. If approved, the Ethereum ETF will be brought into the limelight for both crypto and traditional investors thereby increasing the value of ETH through the increased demand for the product, just as seen with the spot Bitcoin ETF.
The classification of Ethereum as either a security or commodity by the SEC and other regulatory agencies in the US still persist and is a major factor in the approval of a spot Ethereum ETF. But just as the approval of a Bitcoin Futures ETF led to the consideration of a spot Bitcoin ETF, there has been arguments in different quarters that the fact that SEC approved an Ethereum Futures ETF, it is most likely going to approve a spot Ethereum ETF in order to avoid the same legal battle that ensued following the rejection to convert the grayscale’s Bitcoin trust to a Bitcoin ETF.
Both scenarios seems to be playing the same way. We will wait to see the outcome of the application as the final deadline has been scheduled for May 2024. An approval means a massive wave of fund being poured into the Ethereum ecosystem, but a rejection will be a blow to the network and the altcoin space.
The final factor to consider, though not directly related to the Ethereum network, is the upcoming Bitcoin halving event scheduled for sometime around April 2024. How?
The Bitcoin halving event usually signals the beginning of a bull run in the crypto space, and Ethereum being the next in line to Bitcoin in terms of market capitalization and share, there is every tendency that after funds have been deployed to Bitcoin, it will trickle down to other altcoins, first to Ethereum and then other altcoins as per the crypto cycle. Though this cycle seems to be different because of the earlier approved spot Bitcoin ETF which has created a massive demand pressure couple with the supply squeeze. We might see a new all time high for bitcoin before the next halving which is not typically what it used to be.
What ever the case is, we are sure to see Ethereum having a fair share of the capital that will be pouring into the space as we approach these event.
Ethereum is poised to attract lot of attention in the coming weeks and months, thanks to these events. What the price of ETH will be both in the long and short term is not known, but we are certain that there is a growing interest in the Ethereum ecosystem and interest comes with growth, and this time growth in the value and market share of ETH.
At Deftify, we will be tracking the activities and events on the Ethereum ecosystem. Be sure to keep your eyes on the price.
Thank you.
Website | X | Telegram ANN | Telegram Chat | Linkedin | Instagram | Reddit
