Why Is Ethereum Going Up Today? (2024)

In March 2024, Ethereum surged beyond the $4,051 level, reaching heights since January 2022. This increase in Ethereum’s value is amidst speculations about the potential launch of an Ethereum exchange-traded fund (ETF) following the introduction of Bitcoin ETFs. The U.S. approval for Ethereum ETFs is a recent one: the Department of Justice issued an indictment with notable implications for the ETH classification. As a result, there will be a reduction in livelihood, and ETH will be classified as a security.

The U.S. Securities and Exchange Commission’s (SEC) has successfully approved Ether ETFs. The House passed a crypto market structure bill to regulate the industry, marking the first time comprehensive crypto legislation has been voted on in the full House. On Wednesday, the House voted 279 to 136 to pass the Republican-led Financial Innovation and Technology for the 21st Century Act (FIT21). Seventy-one Democrats supported the bill, including former Speaker of the House Rep. Nancy Pelosi of California.

As of May 29, 2024, Ethereum is trading at $3,831, surging 2.17% in the last seven days and has dropped by 0.25% in the last 24 hours, right after the SEC approval. Additionally, the Dencun upgrade was launched on Ethereum in March 2024; the upgrade has yet to give ETH the surge that the market expected.

Following the successful implementation of the Shanghai and Capella Hard Fork, Ethereum, the world’s second-largest cryptocurrency, experienced a significant positive leap within a two-day rally. During this rally, prices rose from around $1,900 to $2,100 in April 2023.

The Shapella rally in the largest altcoin brings hope to the overall cryptocurrency industry, which suffered significant losses during the bear run of 2022. Ethereum witnessed a nearly 65% rally in 2023. This upward trend was expected to continue with the Dencun upgrade, but we did not see that happening.

Ethereum Touches Near $4,000

The world’s second-largest cryptocurrency, Ethereum, witnessed a sharp upside movement over the year 2023 that attracted many investors and speculators to the crypto market. Much like Bitcoin, ETH has been rallying recently. As of May 29, 2024, it is hovering around $3,833.

Rajagopal Menon, Vice President of WazirX, states that the potential launch of an Ethereum ETF would signal that regulators and institutional investors are accepting other major crypto assets beyond Bitcoin. This represents a massive political turning point in crypto acceptance and adoption trajectory. The years-long resistance against crypto by regulators like SEC Chair Gary Gensler seems to wane as the tides turn in an election year and the Democrats try to position themselves as pro-crypto to take on Trump.

He further adds that there are some valid concerns around an Ethereum ETF, given the platform’s transition to proof-of-stake consensus. If the ETFs can accumulate a large amount of ETH, they could hand outsized network control to large institutions like asset managers and custodians. This centralization of block validation raises questions about censorship resistance compared to Bitcoin, which is proof of work.

Overall, the potential approval of an Ethereum spot ETF in the U.S. would be an incredibly bullish development for the crypto markets in India and globally. It would cement the staying power of crypto assets beyond just Bitcoin in the eyes of regulators and institutional capital alike.

Parth Chaturvedi, Head of Investments, CoinSwitch Ventures, stated, “The last week has seen a lot of positive developments for the crypto industry in the U.S., including the FIT21 bill getting approved by the House. However, the maximum impact on market prices came from the speculation that ETH Spot ETFs are closer to approval than previously suspected. In particular, the SEC has reached out to all the applicants (Including BlackRock, Fidelity, and Vaneck) to make certain last-minute changes before their approval deadline is breached.”

He added, “The spot ETF will allow for an easy way to get exposure to ETH prices without the concerns associated with holding the underlying asset.”

Cancun-Deneb (Dencun) Upgrade: 2024

After the Shapella upgrade last year, Ethereum is set for a new upgrade this year. The 2024 upgrade, which introduced danksharding and proto-danksharding, was launched in March.

Danksharding divides the ETH blockchain into smaller, more manageable parts called “blobs.” Implementing the upgrade will increase the network’s capacity and reduce transaction fees.

Proto-Danksharding, also known as EIP-4844, is a proposed feature in the upgrade that builds upon the notion of danksharding. By creating added space for storing data within the ETH network, it expands the capability of danksharding. The proto-danksharding implementation has essential implications for layer-2 rollups. This upgrade will make more space available for data blobs to lead to a more seamless and cost-effective experience for ETH users. It is expected to reduce gas gees connected using layer-2 solutions.

ETH continues to gain attention with its innovative approach towards the highly anticipated Dencun upgrade. The upgrade comprises a series of upgrades for both the Cancun – execution layer and the Deneb – consensus layer of the ETH network. These simultaneously bring about remarkable changes to enhance security, scalability and usability.

With the Dencun upgrade, ETH aims to provide a more robust infrastructure for dApps and smart contracts, encouraging innovation and driving the adoption of blockchain technology. This radical change represents the next phase in Ethereum’s evolution and promises enhancements to attend to existing challenges and unlock new possibilities.

Major Developments in Ethereum

Will Ethereum Reach $4,500?

As of May 29, 2024, Ethereum is trading at an outstanding level of $3,832 with a market capitalization of $460.35 billion. Since the “Shapella” upgrade, ETH has maintained tremendous growth levels. It has increased 101.78% in the last year.

Ethereum’s market performance is currently at 26% fear at the time of writing, with substantial institutional demand, increased inflows to BTC ETFs, and the U.S. SEC approving spot ETH ETFs.

The price prediction for 2024 ranges from $4,500 to $4,700. The anticipated range for February is $2,650, primarily due to investors’ excitement around the Ethereum Spot ETF. Ethereum has shown robust performance this month.

The future outlook for ETH price suggests a promising trajectory in 2024, with dynamic shifts, potential bullish momentum, and pivotal moments anticipated throughout the year. Time will tell whether the upgrade will be a hit or flop for Ethereum.

Bottom Line

Most cryptocurrencies, including BTC and ETH, are experiencing positive trading trends due to investors’ interest in Spot Bitcoin ETFs and the current approval in spot ETH ETFs.

Anticipation has played a pivotal role in Ethereum’s reaching one of its highest positions in the last year. The Dencun is already launched on Ethereum, and the chances of the U.S. SEC approval of spot ETH ETFs will probably sustain the upward momentum this year and in the future.