Is Ethereum a Good Investment after BTC Crypto ETF?

Crypto is becoming mainstream and Bitcoin approval is a
testament to this. We all hoped that Bitcoin would get approved later if not in
January – and it did. Bitcoin is now available on traditional exchanges as
ETF and new investors are getting into it. Everything seems perfect and
calculated. However, what we didn’t see coming was the “sell the news” effect
on Bitcoin price. The price of Bitcoin dropped soon after the approval and
couldn’t match the anticipated hype and expectations of the Bitcoin maximalists. This has allowed Ethereum to shine and attract investors with significant moves. Does that make Ethereum a good investment? Time to find.

Crypto ETF: Bitcoin Spot ETF

I thought Bitcoin approval was a 2023 story but upon digging
I found out that Winklevoss twin, the founder of the Gemini exchange in 2013, filed the first Bitcoin ETF application. In response to their application,
the SEC rejected the application in 2017. From 2016 to 2019, various
applications were filed by various entities and were rejected. The reasons for
rejections were such as lack of transparency, liquidity, custody, and
surveillance.

In 2020 SEC issued a public outline for the areas to address
before applying to avoid rejection or delay. The SEC approved the first Bitcoin
futures ETF, ProShares Bitcoin Strategy ETF (BITO), which began trading on the
NYSE Arca on October 19, 2022. Fast track to 2024, BTC Spot ETF was approved
for all the applicants on January 10, 2024. Now BTC Spot ETF is the second
largest ETF commodity.

The price of Bitcoin is finally below $40,000
psychological support level and headed to the next local support in December
23, at $38,000. Bitcoin is down 9% in the last 30 days and lost over 6% this
month.

Almost everyone was bullish about Bitcoin ETF approval so
the price started bullish momentum after November 27. Since then, the price of
Bitcoin has 27% and reached a high of $49,000 – a momentary candle that
retraced back to $46,500. The price of Bitcoin has dropped more than 18% after
Bitcoin Spot ETF approval.

Bitcoin Dominance reached a high of 55% due to the ETF hype which
then dropped back to 50%. This means that half of the crypto marketcap is in
altcoins while half of the money is in Bitcoin. The plummeting price of Bitcoin
gave altcoins, particularly Ethereum, a chance to shine and falling BTC
dominance is a clear indication of this.

Is Ethereum a good investment? 100

Ethereum is the top-ranking crypto among altcoins and has
probably the best track record as being the second-largest crypto after
Bitcoin. Here are some potential upsides and downsides whether you should invest
in Ethereum or not.

Potential Upsides:

• Sound Track Record:  Ethereum has a proven track record of being a
  strong project by marketcap, developer community, and brand recognition.
• Technological Advantage: The
  developer community behind Ethereum is actively improving the project. Through
  hard fork updates, changing to proof of stake mechanism, and “The Merge”
  in 2023, Ethereum is addressing scalability and energy consumption concerns.
• Backing Projects: Ethereum
  EVM is the backbone and one of the most effective tools for developers to build
  dApps, Web3 applications, NFTs, and other smart contract-based solutions.
• Potential to Grow: Ethereum
  coin, with all its innovation and use cases, has a high potential to grow in
  the future. This makes Ethereum a good option to invest.

Potential Downside:

• High Volatility: Ethereum’s
  price can fluctuate significantly over a short period of time and investors
  might lose their money.
• High Competition: Ethereum
  has many competitive blockchains and coins like Solana, ADA, BNB, and XRP. These
  blockchains offer high scalability and low transaction fees.
• Regulatory Uncertainty: Since
  Bitcoin ETF is now approved, it makes BTC the first choice of investors in the
  high-cap coins. Ethereum ETF is still in process and the future adoption of it
  is uncertain.

Ethereum Shines after BTC ETF

Bitcoin’s ETF approval has long-term
implications for cryptocurrency as it increases the adoption and acts as a milestone in making crypto mainstream. However, Bitcoin price action was unexpected due to the ‘sell the news’ phenomenon. However, this gave Ethereum a head start can investors started pouring money into the best Bitcoin alternative: Ethereum.

The price of Ethereum is 45% up since the ETF buzz and as
compared to Bitcoin, it stands strong against the bearish wave. Easier access
to Bitcoin through ETFs encouraged institutional investors to explore other
promising cryptocurrencies like Ethereum.

Bitcoin was hyped up before ETF which turned the entire
market bullish. However, the swift bearish moves of Bitcoin after ETF were
approved gave Ethereum a chance to shine and allowed day traders to go long.

Ethereum Price Prediction for 2024, 2025:

Most analysts expect Ethereum's price to trend upward in
2024, with a gradual recovery from the current bear market. According to
Changelly, the price of Ethereum is expected to reach $3,805.82 in 2024. In 2025,
the price of Ethereum is expected to reach a maximum of $ 6,520.44 with an
average price of $5,583.67.

Ethereum ETF in 120 days?

According to Bloomberg, seven or more entities have applied
for Ethereum Spot ETF approval after Bitcoin ETF was approved by the SEC. The
most prominent among the applicants include Blackrock and GrayScale Ethereum
Trust. Blackrock filed its ETH ETF application in November last year. There’s a
70% chance that Ethereum ETF will get the SEC’s approval in its next review.
According to many online sources, the deadline for the verdict on Spot Ethereum
ETF is May 2024 (approximately 120 days).

Though Ethereum ETF applications have less potential for
approval than BTC’s that got recently approved, Ethereum bulls are optimistic
about the outcome. Ill Capo of Crypto says Ethereum needs to dip before a final surge.

What if Ethereum ETF is approved?

If Ethereum Spot ETF is approved it will Ethereum exposure
to traditional investors. That would create demand for Ethereum and might help
the price appreciation. According to JP Morgan, Ethereum Spot ETFs would offer
investors an opportunity to gain exposure to the cryptocurrency without worrying
about its security or liquidity.

Moreover, the ETH ETF will pave the way for other potential
projects like Solana and BNB to apply for ETF to gain extra exposure to a new
class of investors.

Takeaway

It depends on personal preferences and risk tolerance whether
to invest in Ethereum or not. Is Ethereum a good investment? Yes, it is.
Ethereum has a good track record, high liquidity, and a bullish trajectory that
at times beats that of Ethereum. However, since the ETH ETF approval is still
pending, there is regulatory uncertainty about its future.