The long-anticipated spot-Bitcoin ETF approval hasn’t brought the result investors hoped for, as Bitcoin (BTC) lost its footing and recently fell below the $40,000 threshold. Now, attention has shifted to the Bitcoin halving, with Ethereum (ETH) potentially being the primary beneficiary of this event.
Upon the completion of mining 210,000 blocks, which occurs approximately every four years, the block reward allocated to Bitcoin miners for transaction processing undergoes a halving. This event is named halving due to its impact on reducing the rate at which new BTCs are introduced into circulation by half.
This event aims to decrease the circulation of new coins and thus increase the price of flagship crypto.
Ethereum to outpace Bitcoin, according to Cathie Wood
Cathie Wood, the Chief Executive Officer of ARK Invest, is recognized for her optimistic outlook on cryptocurrencies, with a notable emphasis on Bitcoin and Ethereum.
Wood’s attention is particularly compelling in the context of Ethereum. She acknowledges Ethereum’s growing significance in decentralized finance (DeFi) and non-fungible tokens (NFTs), recognizing its capacity to address the unmet demand for yield in financial markets. This perspective is accentuated by the current state of fixed-income markets, where the pursuit of yield has reached unprecedented levels, she said in an interview on December 8.
Regarding long-term projections, ARK Invest’s “Big Ideas” presentations offer ambitious forecasts for Bitcoin and Ethereum. Their 2023 presentation outlined three scenarios for Bitcoin, spanning from a bear case of $258,000 to a bull case of $1.48 million by 2030. As for Ethereum, their 2022 forecast envisions a market cap that may surpass $20 trillion by 2032, potentially resulting in a valuation of each ETH at over $166,000.
Financial institutions are bullish on ETH as well
A report from VanEck, an investment management firm, presents a positive outlook for Ethereum’s future. The report delineates three potential scenarios for Ethereum’s market price by 2030: a bullish scenario, a bearish scenario, and a base scenario.
In the event of a bullish outcome, Ethereum’s market price could surge to $51,006, marking a 31-fold increase from its current value. This optimistic scenario is underpinned by Ethereum’s perceived capacity to offer security as a service and its utilization as a store of value assets.
ETF approval for Ethereum as a possible catalyst
The recent spot-Bitcoin ETFs endorsement by the United States Securities and Exchange Commission (SEC) marks a notable milestone in the cryptocurrency industry. This determination is considered a substantial stride towards the broader financial acknowledgment of cryptocurrencies. The SEC will decide on spot Ethereum ETF applications by May 23, 2024.
Numerous events could propel Ethereum’s price to new all-time highs and present investors with substantial returns on their investments, spanning from ETFs to Bitcoin halving. Whether they will remains to be seen.