Ethereum Surges Above $3300: What's Behind the Rally?
Date: 2024-02-28 Author: Dima Zakharov Categories: BLOCKCHAIN
American Investors Boost Ethereum's Surge
The price of Ethereum has surged above $3300, marking a significant rise of over 14% in the past week. Analysts point to American investors as key players in this surge, as the demand for ETH in the United States is driving a new local rally.
Spot ETF Approval Rumors Fuel Interest
Ethereum's appeal to investors is further heightened by rumors of the potential approval of the first spot ETFs on cryptocurrency in the United States. With the SEC approving spot ETFs on Bitcoin earlier in January 2024, institutional players are now turning their attention to ETH.
Anticipation of Regulatory Approval
While Bloomberg analysts estimate a 50% chance of approval for this instrument in May, major investment firms, including market leader BlackRock, have already filed applications to create the tool, signaling promising prospects for Ethereum's institutional adoption.
Upcoming Updates Drive Decentralization Enthusiasm
ETH's attraction extends to decentralization enthusiasts due to regular updates. For instance, on March 13, 2024, the cryptocurrency network anticipates an update called Dencun, introducing a proto-sharding solution expected to reduce transaction fees in Ethereum-based layer-two networks by roughly tenfold.
Challenges Persist with High Gas Fees
Despite Ethereum's advancements, challenges persist with high gas fees on the main L1 chain. For example, the cost for fast Ethereum transactions currently stands at around $5, while selling an NFT can incur fees of nearly $150, highlighting the need for further scalability solutions.
