Ether’s price has surpassed the $4,000 mark for the first time since December 2021, indicating a significant upward trend. On March 8, Ether’s price was at $3,873, but it has since increased by over 4% in the past 24 hours and by 74% year-to-date, reaching $4,003 on Bitstamp, according to CoinMarketCap data.
The surge in Ether’s price can be attributed to two key factors. Firstly, the upcoming Dencun update for the Ethereum network has generated positive sentiment. This update, which is considered the most significant improvement since the Merge, will implement various Ethereum Improvement Proposals (EIPs), including EIP-4844, which introduces “proto-danksharding.” Proto-danksharding enables the blockchain to utilize blobs, simplifying the transaction process by storing some data off the blockchain. This will expedite transactions and reduce costs for layer-2 chains and rollups that rely on Ethereum. The Dencun mainnet is scheduled to go live on March 13.
Secondly, there is anticipation surrounding the approval of a spot Ether exchange-traded fund (ETF) by the United States Securities and Exchange Commission (SEC). Although the SEC has delayed its decision on spot Ethereum ETF applications from BlackRock and Fidelity, market participants remain hopeful that one of these applications will be approved soon. It is expected that the SEC will announce its decision on all spot Ether ETF applications on the same day, similar to what it did with Bitcoin ETFs on January 10. The SEC has until May 23 to allow or deny an Ether ETF, and Bloomberg ETF analyst James Seyffart believes the process will be quicker for Ether ETFs compared to Bitcoin ETFs.
If a spot Ether ETF is approved, it is likely to have a positive impact on Ether’s price performance, similar to the success experienced by spot Bitcoin ETFs since their introduction on January 11. This could attract more institutional investors and increase capital inflows into Ether, especially as attention shifts away from Bitcoin’s recent all-time high.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and exercise caution when making investment decisions.