The next highly anticipated Ethereum update, called Dencun, will take place the day after tomorrow: what will be the predictions on the price of ETH?
The Dencun Upgrade will be upon us on March 13!
Learn everything you need to know here
https://t.co/LyfE0ekdLM
— Consensys (@Consensys) March 6, 2024
Predictions on the price of ETH post Dencun update
The fact is that while the price of Bitcoin has already reached its new all-time high in this 2024, Ethereum is still far behind.
For now, the absolute maximum remains the almost $4,900 of November 11, 2021, while during this 2024 the maximum was reached today above $4,040. Therefore, there is still a nice +17% missing to be able to record new highs.
Nevertheless, the price of ETH is up +15% in the last seven days, and even up +60% in the last thirty.
If we extend the comparison to October 2023, before the current bull run started, the gain rises to +160%, compared to +165% of Bitcoin.
So actually the price growth of ETH in this bull run is similar to that of BTC, only that in 2023 it had performed a little less well: +91% compared to +155%.
This indicates that it was 2023 the year that allowed Bitcoin to start to reach new highs this year, while this has not yet happened for Ethereum.
However, the boom that started in February seems to be able to make ETH make one last effort to try to reach around $4,900.
Dencun: The forecasts on the price of Ethereum $ETH
In theory the Dencun upgrade on March 13th could give a boost in this direction.
According to a recent analysis by Bitget, the crypto markets may already be pricing in the effects of the upgrade on ETH, anticipating the benefits brought by this upgrade and the reactions to the success of its implementation.
The hypothesis is that this wait could lead to an increase in price volatility in the short term, due to the fact that operators and investors are adjusting their positions based on the expected impacts on the functionality and market position of Ethereum.
Indeed, the +83% increase in the price of ETH since the end of January seems to confirm this hypothesis, also because during the same period BTC has recorded a +79% increase that would be difficult to justify in any other way.
So after a lower 2023, in terms of Ethereum’s price performance compared to Bitcoin’s, 2024 is proving to be very similar, but the anticipation for the Dencun upgrade is causing ETH to perform slightly better.
The ETF on Ethereum spot
Furthermore, Bitget analysts claim that Dencun could potentially pave the way for a Spot ETF on ETH in the USA.
They write:
“With the increasing relevance of Ethereum and the growing institutional interest in crypto, the time may be ripe for regulatory authorities to consider approving an Ethereum ETF.”
The hypothesis is that the SEC will make a decision in May, which is the month following the Bitcoin halving, but other analysts are not so optimistic.
Indeed, some negative signals are emerging about it.
Normally I’d say this was good sign but as far as I know the Staff has not given any comments yet to the issuers, which is not a good sign as we past when they gave comments on btc ETFs. Further, there’s no court loss hovering over. And the correlations bt futures and spot isn’t… https://t.co/AVMhL1QKGf
— Eric Balchunas (@EricBalchunas) March 8, 2024
Before the approval of the Bitcoin spot ETFs, the SEC had a lot of dialogue with the applicants, to the point of requesting changes to their requests until the last moment.
It seems instead that for requests regarding Ethereum ETFs things are going differently.
The difference with Bitcoin
It is important to underline a significant difference with the procedure that led to the approval of Bitcoin ETFs.
Indeed, in that case the SEC actually initially rejected all requests in this regard.
Afterwards, Grayscale had sued the SEC for its decision to reject its request, and later a court ruled in favor of Grayscale and against the SEC.
So the SEC ultimately had to accept approving BTC ETFs because a court had actually ordered them to do so with a specific sentence.
There is no such ruling for ETH yet, so it is possible that the SEC intends to initially reject the requests for the issuance of ETFs on Ethereum spot, waiting for a new ad hoc ruling from a court that orders them to do so.
It should not be forgotten that the USA is in the midst of the electoral campaign for the presidential elections in November, and the president of the SEC Gary Gensler seems to be clearly in favor of the Democrats, currently in power, who are largely against cryptocurrencies.
If a rejection were to occur in May, it would take some time before reaching a new judgment, and then the SEC would have several more months before being required to approve them. So if a similar process were followed, the eventual approval would come after the November elections, after the end of the election campaign.
It should be noted, however, that the markets are aware of all this, so they may not be particularly scared if the SEC initially rejects the requests for the issuance of ETH on Ethereum spot in the USA.
