ETH Price Rally Fuelled by Ethereum Dencun Upgrade, Not Spot ETFs: Grayscale

The Dencun Upgrade is one of the most important Ethereum upgrades.

26 Feb 2024 | 3 min read

Key Takeaways:

Dencun Upgrade Driving Ethereum’s Surge: Grayscale Investments posits that Ethereum price surge is primarily attributed to the anticipated Ethereum Dencun upgrade scheduled for March 13, 2024. This upgrade is expected to enhance transaction throughput and reduce costs, making Ethereum more competitive in the blockchain space.
Grayscale’s Bullish Stance: Grayscale, known for its influence in the crypto investment landscape, expresses a bullish stance on Ethereum. Analyst William Ogden Moore suggests that Ethereum’s potential is closely tied to the Ethereum Dencun upgrade, highlighting the market’s positive outlook on the crypto’s improved capabilities.
Underperformance in 2023: The report acknowledges Ethereum’s underperformance in 2023 compared to its sector, especially when juxtaposed with the remarkable growth of Solana, which experienced a surge of 900%. Despite this, Grayscale remains optimistic about Ethereum’s future based on upcoming developments.
Spot ETF Conversion Efforts: Grayscale’s report suggests that their positive perspective on Ethereum’s future might be influenced by their ongoing efforts to convert their Ethereum trust into a spot Ethereum ETF. With spot Bitcoin ETFs gaining approval, there is speculation that Ethereum might follow suit by May 2024.
Ethereum’s Potential Beyond Dencun: Beyond the Dencun upgrade, Grayscale emphasizes factors such as “net deflationary supply” and “network revenue generation” as contributors to Ethereum’s future success. The report also underscores Ethereum’s potential to regain ground in the smart contract application market by improving throughput and reducing costs, making it attractive for applications requiring high security and censorship resistance.

Ethereum’s recent price surge has been a topic of great interest, with many attributing it to the potential approval of a spot Ethereum ETF. However, Grayscale Investments, a prominent asset manager, has presented a distinctive viewpoint in a recent report. According to Grayscale analyst William Ogden Moore, the upcoming Ethereum Dencun upgrade, scheduled for March 13, 2024, is the primary catalyst behind the Ethereum price’s upward momentum.

Moore contends that the market is anticipating the Dencun upgrade for its potential to enhance transaction throughput and reduce costs, positioning Ethereum as a more competitive player against faster blockchains like Solana. Despite being optimistic about Ethereum’s future, the report acknowledges the crypto’s underperformance in 2023 compared to its sector, notably lagging behind Solana’s remarkable 900% growth.

Grayscale’s bullish stance may be influenced by their ongoing efforts to transform Ethereum trust into a spot Ethereum ETF. While spot Bitcoin ETFs have already received approval, there is speculation that a similar approval for the Ethereum equivalent might occur by May 2024.

In addition to the Dencun upgrade and the potential ETF approval, Grayscale’s report underscores the significance of “net deflationary supply” and “network revenue generation” as contributing factors to Ethereum’s future prospects. Furthermore, the report emphasizes Ethereum’s potential to reclaim lost ground in the smart contract application market. By improving throughput and reducing costs, Ethereum aims to attract applications requiring high levels of security and censorship resistance, including stablecoins and tokenized financial assets.

As the crypto community eagerly awaits the Dencun upgrade and potential ETF developments, Grayscale’s insights shed light on the multifaceted factors driving Ethereum’s rally. The market dynamics and Ethereum’s evolving capabilities position it as a key player in the blockchain space, with the Dencun upgrade emerging as a pivotal moment in its ongoing development.

Source: CoinMarketCap / Grayscale Research

ETH Price Rally Fuelled by Ethereum Dencun Upgrade, Not Spot ETFs: Grayscale

Key Takeaways:

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