What could Ethereum’s price rise to $10,000 if the first ETF was approved? Discover the factors that are driving this bullish outlook.
EthereumETHETH ETF is the focus of attention as the entire crypto-world awaits its launch. As of July 2 ETH’s price is $3,447. That represents a 0.33% decrease in the last 24-hours.
ETH reached a low monthly of $3,244 in June. It has since rebounded strongly, with a gain of about 6%. This price increase for ETH is a sign of bullish sentiment as the market looks forward to the upcoming ETF.
The U.S. Securities and Exchange Commission is responsible for regulating the U.S. Securities and Exchange Commission.SECThe launch of the highly-anticipated Ethereum ETFs has been delayed.
The launch, originally planned to take place in early July has now been delayed due to additional comments made by the SEC regarding the S-1 form submitted by the potential issuers. They now have until 7/7/17 to submit revised versions of their forms. Launching the new S-1 form could be delayed to as late as mid-July.
This is one of two steps in the approval process. First, form 19b-4 was approved. completed The deadline for filing the S-1 forms is May. The S-1 form, which represents the second stage, does not have a deadline. This leaves issuers to the SEC review schedule.
Understanding the Ethereum market and its updates will help us to better understand what the ETF is going to be.
Ethereum updates
Ethereum has been humming with excitement as it gears up for its launch of the first ETF. Vitalik Buterin is the co-founder of Ethereum. shared This blog will detail the latest Ethereum developments.
Ethereum has a key goal of improving confirmation times for transactions. Due to EIP-1559 implementation and consistency in block times after Merge, Ethereum’s Layer 1 Network (L1) confirms transactions within 5-20 secs.
While the speed of this application is comparable to that required for credit card payments, some applications need confirmation times measured in milliseconds. Buterin suggests potential changes.
Gasper, Ethereum’s existing consensus mechanism, uses slot-and-epoch technology. This system allows validators to vote for the chain head once every 12 second. The process takes about 6.4 minute (32 slots) before all validators have cast their votes. After two epochs (or 12.8 minutes), the finality is reached, providing strong economic assurance. This process, however, is slow and complex.
Buterin’s proposal for single-slot closure (SSF), which aims at simplifying and accelerating this process. SSF allows each block to be finalized before the next one. next. This is similar to Tendermint’s consensus, while maintaining Ethereum’s “inactivity leak” Mechanism that aids chain recovery in the event validators are inactive.
SSF, however, requires validators publish two messages once every 12 seconds. This presents a problem. Orbit SSF and other recent proposals suggest ways to reduce this work load.
Ethereum, meanwhile, is moving towards a roadmap that focuses on rollups. The base layer (L1) focuses primarily on data security, while Layer 2 (L2) technologies like rollups manage the majority of transactions.
The same level of security is offered by Rollups, but with a greater speed and scale. Users still want faster confirmations.
Rollup preconfirmations were proposed to address this. A smaller group is responsible for quickly approving blocks. This gives users faster confidence. These pre-confirmations can be eventually published on L1 for security and to provide finality.
This approach uses advanced Ethereum developers to provide preconfirmations. Users may pay an extra fee in order to have their transactions included. next block. The proposer will be penalized if he or she fails to deliver on their promise. The same mechanism is applicable to L2s and facilitates faster confirmation of transactions.
The demand for ETH could be increased by faster confirmations of transactions and simpler consensus mechanisms. These improvements may boost market confidence as the launch date of the spot ETH ETF nears. This could drive up ETH’s price.
Ethereum gas prices and Total Value Locked (TVL),
Ethereum is preparing to launch the first spot ETH-ETF, and two key aspects of its eco system are in focus. gas fees Total value lockedTVL).
Ethereum operates on a gas fee system that covers all transactions. smart contract Validator Rewards can reduce network security costs and encourage validators to improve their performance.
Recent years have seen a dramatic drop in gas fees. Dune Analytics reported that on June 30, the average price of gas dropped to 3 Gwei or $0.14. Last year’s median gasoline prices were between 15 and 20, with the highest price being 83 Gwei in March of this year.
Multiple factors have contributed to the decline. Analysts attribute this to the increased efficiency of the Layer 1 market (L1), which is driven by the expansion of Layer 2 activity (L2) and the introduction “blob transactions” Scalability of Ethereum can be improved via EIP 4844.
Ethereum becomes more affordable with lower gas costs, which may encourage broader adoption. Affordable gas prices can encourage activity in decentralized financial sectors.DeFi( NFTsPrior to this, high transaction costs were a hindrance.
TVL, on the other hand, represents all capital within Ethereum’s DeFi eco-system, which is a crucial metric in determining network health. However, ETH TVL recently decreased. declined. The latest figures show that after reaching $67.45 billion at its peak on 6 June, the figure has fallen to just $59.45. That represents a decrease of approximately 11.3%.
It is a decline after a year of growth, and it still remains below the peak value of $106 billion that was reached in November 20, 2021. That’s when ETH hit its highest ever price.
This trend is influenced by several factors. The volatility in the broader cryptocurrency market has affected investor confidence.
Second, lower gas prices could reverse the TVL drop by attracting developers and users to Ethereum applications. This would enhance the overall value and utility of the network.
What you can expect next?
Matt Hougan is a crypto expert and an ETF specialist. He predicts Ethereum ETPs will generate $15 billion of net flow in their first 18-months.
The relative size of Bitcoin, Ethereum and the current investment trends for crypto ETPs in Europe and Canada are used to calculate this figure.
Bitcoin ETPs are more popular in these areas, and their assets roughly match the market capitalization of Ethereum ETPs. Hougan predicts a similar pattern in the U.S. with ETH capturing 22% market share. This is slightly less than the 26% market capitalization weight.
Hougan explains further that U.S. Investors currently have $56 Billion invested in Bitcoin ETPs. This is projected to increase to $100 Billion by 2025.
After applying a similar pattern of growth to Ethereum, he estimated that spot Ethereum ETPs would need 35 billion dollars in assets under administration (AUM) before they could reach parity. ETHE is expected to launch with assets of $10 billion, so the required net flow will be approximately $25 billion.
Comparing these figures with the European and Canadian markets, where Ethereum ETPs hold about 22-23% of the total crypto ETP market—slightly lower than ETH’s market cap weight—Hougan finds consistency across geographies, reinforcing his confidence in the estimate.
Hougan’s net flow estimates were revised down from $18 billion to $15 billion after adjusting for lower expected relative demand.
Market sentiment is also positive surrounding Ethereum ETFs. Andrey Stoychev heads up prime brokerage for Nexo. believes ETH is expected to reach $10,000 this year. The ETFs that are available in Asia and America could help ETH achieve the same level as Bitcoin did after its ETF.
Ethereum’s value could increase substantially if capital inflows are as predicted.
It’s important to always remain alert, and be aware of both the risks and opportunities associated with the cryptocurrency market. Never invest more money than you are willing to lose.
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Source: crypto.news