- Cryptocurrencies continue moderate gains after weekend, dollar loses slightly
- Bitcoin is trading at $52,500, while Ethereum is approaching $3,000
- Bernstein expects strong interest in Ethereum among institutions and 'spot ETFs' approval
A week that is likely to bring high volatility in the stock market, (Nvidia results after the session, Wednesday), cryptocurrencies open with moderate gains. Investors' attention shifts to Ethereum, which has recorded a powerful rally in recent weeks. The dollar is losing slightly, and indexes in Europe are trading mostly lower, after a mixed session in Asia.
Crypto market attention shifts to Ethereum
- Analysts from Bernstein estimate that the chance of launching ETFs (ETCs) on ETH in May is 50%, and that the Ethereum blockchain will undergo a Dencun update in May, aimed at cutting transaction costs.
- Bernstein analyst note suggests that Ethereum may be another 'institutional darling' as post-Dencun costs will drop by 50 or even 90%, and the probability of creating spot funds on Ethereum, over a 12-month horizon, is close to 100%.
- Dencun could also prove to be a positive fundamental factor for the ETH price, as developers have programmed a mechanism to 'burn' (reduce the supply of) ETH
- EIP-1558 mechanism in such a way that the high volume of transactions on the network (the volume of which can support lower fees) supports a 'supply shock' in which Ethereum achieves a permanently deflationary operating model (similar to Bitcoin).
- Bernstein analysts stressed that Ethereum's blockchain appears friendly to wider adoption of blockchain technology, and that so-called staking may encourage investment by mainstream institutions, especially in a lower interest rate scenario.
- They also assessed that institutions are interested not only in setting up Bitcoin-like funds, but in discovering the potential of the Ethereum blockchain and tokenization. The Dencun update appears to be a very important step here, reducing the cost of using the Ethereum network.
Ethereum and Bitcoin chart (D1)
Source: xStation5
Source: xStation5
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Create account Try a demo Download mobile app Download mobile appGlassnode pointed out that Bitcoin's price rebounded again in January after short-term traders' addresses indicated (at $42,000) a level close to 'break even' suggesting a level that has historically created downward pressure. The rapid unwinding leads short-term speculators again to very high levels of unrealized gains. Source: xStation5
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