Ethereum hits $3k on Dencun, spot ETH ETF anticipation

Ethereum’s native token reached $3,000 on Feb. 20, following a week-long rally as cash poured into several cryptocurrencies in 2024.

This was the first time since April 2022 that Ethereum (ETH) hit this level, reaffirming bullish sentiment toward crypto’s second-largest asset and blockchain. According to CoinMarketCap, ETH grew more than 2% in the last 24 hours and over 13% in the past seven days.

Ethereum now has a market cap above $355 million following the latest increase, accounting for just over 18% of crypto’s total market. Year-to-date (YTD), ETH is up 30% as well. 

Ether’s growth has coincided with Bitcoin (BTC) increases and the total cryptocurrency landscape. Bitcoin has experienced increased demand after the U.S. SEC allowed spot BTC ETFs to trade on national exchanges, like the NASDAQ and CBOE.

Some analysts pointed to spot Bitcoin ETFs as a catalyst for broad interest in crypto markets. TradingView data backs up this narrative, as crypto’s market cap has expanded by nearly 20% two months into the year. 

Ethereum’s ETF momentum

Issuers are also gunning for the same product, with ETH as the underlying asset. As crypto.news reported, several issuers from ARK 21Shares to Invesco Galaxy have filed applications to list spot Ethereum ETFs on U.S. exchanges.

These products already exist in futures contracts, which track forthcoming Ether prices rather than spot prices. The SEC has typically denied crypto spot-based products, citing market manipulation and fraud concerns, but Judge Neomi Rao’s ruling in the Grayscale case overturned this tactic. 

Judge Rao labeled the SEC’s decision “arbitrary and capricious”, finding the decision to approve and deny similar products inadequate by law. 

Industry proponents are hopeful that the same rationale might apply to ETH-based products, although SEC Chair Gary Gensler has occasionally expressed a divergent view. Gensler has yet to address whether Ethereum is a security or not categorically but insists that the vast majority of cryptocurrencies fall under financial rules. 

Analysts predict a 50% chance that Ethereum ETFs tracking spot ETH prices receive the regulatory nod in the second quarter of 2024.

The SEC has delayed approving or denying spot Ethereum ETFs until May, while a technological upgrade continues to fuel optimism surrounding the cryptocurrency. ETH developers aim to deploy Dencun to the mainnet before the end of March. 

Dencun introduces proto-danksharding, an update to bolster data availability for layer-2 rollups. The solution will add blobs to on-chain activity and is touted to reduce gas fees, making it easier and cheaper to transact on Ethereum’s ecosystem.