Matt Hougan, Bitwise’s Chief Investment Officer has made a bold prediction of the price of Ethereum once it gains final regulatory approval by the United States Securities and Exchange Commission (SEC).
Ethereum Might Trigger Greater Impact Than Bitcoin ETF
According to Hougan, the spot Ethereum ETF once unveiled for trading could propel the price of the digital asset to $5,000 over time.
Hougan maintains that once launched, Ethereum ETF will have a greater impact on the broader cryptocurrency space in comparison to Bitcoin. He, however, acknowledged that following regulatory approval, Ethereum may experience a rough time for a couple of weeks. Hougan says the outflow of funds from Grayscale Ethereum Trust (ETHE) following conversion to ETF is one likely factor that will cause the jerky start.
Nevertheless, Hougan is optimistic that by the end of the year, based on inflows and market dynamics, Ethereum will record new price all-time highs. Recently, the Bitwise CIO explained how spot Ethereum ETF will amass $15 billion in locked assets within 18 months of launch.
Notably, Hougan’s confidence in the rise in Ethereum price rests on a tripod of reasons. Primarily, over the past year, Ethereum has maintained a 0% inflation rate. In contrast, Bitcoin stayed at 1.7% when the spot ETFs launched in January.
Another significant reason is that Bitcoin miners had to cover operational costs by selling the new BTCs minted. However, stakers incur very low direct costs in securing the proof-of-stake protocol. Therefore, there will might be little or no sell pressure on Ethereum when compared to Bitcoin.Â
Additionally, stakers earn rewards from locking up their assets and making a profit off the market.
ETH Growing Scarcity
Interestingly, based on current market metrics, Ethereum is becoming scarcer compared to Bitcoin as the exchange balance of both digital assets stands at 10.189% and 15.086% respectively. This signals a stiff gap between both cryptocurrencies and supports Hougan’s forecast.
As of the time of writing, CoinMarketCap data reveal Ethereum is up 1.60% to trade at $3,461.59 while the market cap is up 1.59%. There is great anticipation in the broader cryptocurrency ecosystem that the U.S SEC will give the nod for spot Ethereum ETF trading to commence, anytime soon.
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