Ethereum
4 Reasons to Buy Ethereum While It’s Under $4,000
Ethereum Could Surpass Bitcoin In The Second Half Of 2024. Here’s Why.
During the first six months of the year, Ethereum (ETH 0.69%) has largely kept pace Bitcoin (Bitcoin 0.68%). Both are now up about 45% year-to-date, and the big question on many investors’ minds is which one will outperform over the remainder of 2024.
In early May, the most obvious answer would have been Bitcoin. But Bitcoin has stumbled lately, and that has opened the door to EthereumThere are now four compelling reasons why Ethereum could surge even if Bitcoin continues to move sideways.
The new ETFs
Bitcoin, of course, has had spot exchange traded funds (ETF) since January. And the introduction of this new investment product has arguably been one of the most important crypto narratives of 2024. But there’s a new twist in that narrative. In late May, the Securities and Exchange Commission (SEC) finally approved new spot ETFs for Ethereum.
Image source: Getty Images.
It’s still unclear what the impact of these new ETFs will be. The current thinking is that they will start trading this summer and could result in an injection of $3 billion into the new ETFs. However, this is a bullish scenario. According to JPMorgan Chase (JPM 0.88%), the bearish scenario is closer to $1 billion. That’s barely a blip compared to the $30 billion that has flowed into the new Bitcoin ETFs. Nonetheless, they’re still likely to move the needle for Ethereum.
Ethereum, market leader
Ethereum continues to be the undisputed market leader in every major blockchain sector. Decentralized finance (DeFi), for example, where Ethereum still accounts for over 60% of all total value locked (TVL) in the blockchain world. No other blockchain comes close. We can therefore begin to downplay any notion that a challenger such as Solana (GROUND 4.51%), Cardano (ADA 1.97%), or avalanche (AVAX 7.28%) has a clear path to overthrowing Ethereum in the near future.
The market seems to agree. Ethereum is outperforming all of its peers by a wide margin. For example, Solana is up 35%, and Follow (SUI -2.56%) is up 9%. Other leading competitors are in shock. Aptos (APT 1.69%) is down 28%, Cardano is down 32%, and Avalanche is down 33%.
Regulatory clarity
There is another big reason to encourage Ethereum: regulatory clarity. Almost everyone who has ever heard of Ethereum considers it a cryptocurrency. However, during the first six months of the year, there were rumors and whispers about an ongoing SEC investigation into Ethereum, due to uncertainty over whether it would actually acted as a title.
But these rumors now appear to be quelled, with the SEC announcing that it is ending all investigations into Ethereum. This is important because it could open the money spigots for risk-averse institutional investors. Crypto is risky enough without the added risk of an SEC investigation.
Long-term disruptive potential
And finally, there is the long-term disruptive potential of Ethereum. Over the past decade, Ethereum has been a true innovator, opening up niches of the blockchain world that had never existed before. And, judging by all the technological improvements made to the Ethereum blockchain over the past couple of years, this trajectory is likely to continue.
In fact, investment firm VanEck expects Ethereum to see dramatic growth in several key areas, led by DeFi. This is where the Ethereum blockchain can offer the greatest disruptive potential. It’s simply faster, cheaper, and more transparent to manage financial assets on a blockchain. And that could allow Ethereum to gain market share from its traditional financial competitors.
In fact, VanEck crunched the numbers and determined that Ethereum could reach a value of $22,000 per token by 2030. That would give Ethereum an implied market cap of over $2 trillion. Given that the largest Silicon Valley companies are now worth between $1 trillion and $3 trillion, a $2 trillion market cap for Ethereum isn’t as unreasonable as it might seem at first glance.
What to look for in the next six months
In my view, the biggest threat to Ethereum remains the rise of blockchain challengers such as Solana. economic gap the one that once surrounded Ethereum seems to get smaller and smaller with each passing year.
That said, Ethereum is shaping up to be one of the best crypto investments you can make in the second half of 2024. If the new ETFs perform as expected, then it could enter the race to be the second most valuable cryptocurrency in the world. .
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Dominique Basulto has positions in Bitcoin, Cardano, Ethereum, SUI and Solana. The Motley Fool holds positions and recommends Aptos, Avalanche, Bitcoin, Cardano, Ethereum, JPMorgan Chase, SUI and Solana. The Mad Motley has a disclosure policy.