Ethereum is gearing up for a potential new all-time high, with predictions suggesting it could soar past $5,000. Bitwise’s Chief Investment Officer, Matt Hougan, is confident that Ethereum ETFs will play a significant role in this price surge. Hougan believes that the influx of funds into Ethereum ETFs will push its price above $5,000 by the end of the year. He compares the potential impact of Ethereum ETFs to the significant rise Bitcoin experienced when Bitcoin ETFs were approved, noting that Ethereum’s deflationary nature and reduced supply make it even more promising.
Citi Bank supports this optimistic outlook, predicting that Ethereum ETFs could attract around $5 billion in net inflows within six months of their launch. This prediction aligns with Hougan’s view that the new demand created by ETFs, combined with Ethereum’s strong fundamentals, will drive the price upward.
Renowned trader Peter Brandt adds to this positive sentiment, suggesting that Ethereum could rally by 60% if it successfully breaks through key resistance levels. He points to Ethereum’s current price of around $3,460 and notes that if it surpasses $3,502, significant short positions will be liquidated, potentially driving the price even higher.
Several factors contribute to this bullish outlook for Ethereum:
- Deflationary Nature: Since the implementation of Ethereum Improvement Proposal 1559 (EIP-1559), Ethereum’s supply has been deflationary or near zero, reducing the amount of ETH in circulation with each transaction.
- Lower Selling Pressure: Unlike Bitcoin miners, Ethereum’s consensus mechanism incurs lower economic costs, reducing the need for holders to sell their assets.
- Increased Staking and DeFi Usage: Over 40% of Ethereum has been removed from the market due to staking and usage in decentralized finance (DeFi) protocols, further reducing supply.
The Securities & Exchange Commission (SEC) is expected to approve Ethereum ETFs for trading soon, with a launch date anticipated for July 23. This approval is expected to drive significant new demand for Ethereum, potentially leading to new all-time highs.
