Despite the recent approval of Spot Ethereum ETFs, analysts anticipate the probability of Ethereum making a new all-time high by the end of 2024 is very low. The analysts attribute this prediction to Ethereum’s inability to keep momentum compared to tech stocks. This viewpoint diverges from the prevailing optimism among crypto enthusiasts who believe the price spike is just around the corner.
Spot Ether ETFs Loose Wall Street Faith
The exciting debut of spot Ether exchange-traded funds (ETFs) on July 23 couldn’t outshine the allure of profitable technology stocks. While it attracted a lot of attention from Wall Street investors, it faced tough competition from other attractive investment options. Technology stocks continued to be more appealing due to their higher earnings and growth potential.
The weak performance of Ethereum ETFs can be attributed to the underperformance of Ethereum itself. According to CoinMarketCap data, Ethereum’s current price of $2,276.97 (far away from making a new all-time high) is lower than the opening price of Jan 1 which was $2,282 to lure investors over tech stocks. This weak performance has driven investors to seek out more successful tech stocks, such as Nvidia and Meta.
Nvidia (NVDA) has seen a remarkable increase of 122.57% in its value, trading at $107.21. Similarly, Meta Platforms (META) has gained 49.26%, currently trading at $516.86. These impressive gains have made these tech stocks more attractive investment options compared to Ethereum ETFs.
Ethereum’s Future Trajectory
Regarding Ethereum’s future, many traders and crypto enthusiasts hold a positive outlook. However, Nick Forster, founder of the crypto derivatives platform Derive and a former Wall Street trader, expressed a different perspective in an interview with Cointelegraph. He stated that Ethereum is currently lacking a compelling narrative to fuel its price growth, particularly when compared to other assets.
He indicated that Ethereum breaching its previous all-time high of $4,878 by the end of the year is unlikely. However, he suggests that several factors could potentially drive Ethereum’s price towards making a new all-time high, including a victory for Donald Trump in the US presidential election, aggressive interest rate cuts by the Federal Reserve to increase liquidity, and a broader expansion of global financial liquidity.
Bitcoin Trajectory to Watch
Given Bitcoin’s 56% market dominance, Ethereum’s price often mirrors Bitcoin’s movements. Some analysts are skeptical about the upward move of Bitcoin in the context of the September Fed rate cut. Crypto analysts at Bitfinex warned that Bitcoin could drop as much as 15%-20% following the September rate cut if the easing cycle is paired with recession.
Bitfinex analysts pointed out that the historical effect of aggressive rate cuts leading a boost in the asset price initially, but could not last due to rising uncertainties remaining in the economy. They prefer for a 25bps rate cut as the initial cycle rather than 50bps as rumored in the market. They said that September is the weakest month of the year and it never favors Bitcoin.
September is the Optimistic Month for Crypto
Similar to Bitfinex, crypto analytics firm K33 predicts a price decline for Bitcoin in September. However, K33 views this as a potential buying opportunity, anticipating a strong rebound in the following months.
According to Vetle Lunde, a senior research analyst at K33, historically the most effective strategy has been to buy Bitcoin in September to prepare for a potential price increase in the fourth quarter.
Also Read: Crypto Custodial Service Under Fire: U.S. Fed Intensifies Scrutiny
