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Why Ether’s Triumph Over Bitcoin Matters
Why Ether’s Triumph Over Bitcoin Matters

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Ethereum coin, padlock. Ethereum security. Digital cyber safety, Blockchain technology to encode online information.

Liliya Filakhtova

With the U.S. Securities and Exchange Commission’s approval of the country’s first spot bitcoin exchange-traded funds, investors anticipated a significant impact on the 15-year-old cryptocurrency. However, bitcoin’s price has not reflected this optimism. Instead, the spotlight has shifted to ether (ETH-USD), the second-largest cryptocurrency, which has surged 14.4% since the start of 2024 compared to bitcoin’s 3.7% climb.

Rising Interest in Ether

Upon the approval of 11 bitcoin ETFs, investors have pivoted towards ether, propelling its price upward. This surge in interest may be attributed to the anticipation of ETFs investing directly in ether receiving the SEC’s blessing. The price action of bitcoin following the approval suggests that the significant uptrend it has enjoyed in recent months may be plateauing, at least temporarily.

Institutional Backing

Significantly, BlackRock CEO Larry Fink expressed a keen interest in an Ethereum ETF, indicating a broader industry sentiment. BlackRock’s iShares unit has already filed for the registration of a spot ether ETF and is not the only firm in the race. Grayscale, Invesco, VanEck, and Ark are among the other contenders seeking approval for ether ETFs, suggesting a broader industry shift towards ether.

Potential of Ether ETF Approval

Contrary to the previous year when bitcoin outperformed ether, the tides seem to be turning in 2024. As the optimism for bitcoin ETFs grows, the performance of ether seems aligned with the potential approval of an Ethereum ETF. Experts argue that ether could be on track for a similar surge to that of bitcoin, building up to the event of potential ETF approval.

Regulatory Hurdles and Implications

The road to an ether ETF approval may not be without hurdles, as SEC Chair Gary Gensler views crypto assets other than bitcoin as securities, subject to regulations. Whether an approval is imminent remains to be seen, with a decision expected by May. Nevertheless, such an approval would confer legitimacy upon crypto as an asset class and could pave the way for a broader range of cryptocurrencies to be packaged into similar investment vehicles.


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