There's been a lot going on in the cryptocurrency market lately. The ETH rate rose and broke USD 3,000. Currently, the digital currency is struggling to maintain this level.
The ETH rate is heading north
The Ethereum cryptocurrency is becoming more expensive. It currently costs USD 3,000, which means that its price has increased by just over 2% over the last 24 hours. On a weekly basis, we are already talking about a 13 percent increase.
The above translates into moods. The Ethereum Fear and Greed Index is as high as 81, which means extreme greed of investors (Extreme Greed).
Bitcoin does not fare well in this context. 1 BTC costs USD 51,900, which means that one coin was paid 4% more a week ago than today. Yesterday the price was about the same.
The reason for the increases? Is the market waiting for an ether ETF?
Currently, it is not known whether spot ETH ETFs will be created, but there are many indications that the market may already be willing to accept this type of “yes” from the Securities and Exchange Commission. If officials are to agree to the creation of such products, they will probably do it as early as May. Then March, April and part of May may be marked by increases.
And without ETFs, ether may become more expensive in the coming months. Reason? General situation in the project network. The recent change in the method of ETH issuance (moving from the Proof of Work to Proof of Stake algorithm) has resulted in ether now being a deflationary currency. Fewer new ETH units are entering the market than are being put into staking pools. Supply is decreasing and demand may increase in the coming months. The result can only be an increase in price.
The above phenomenon may additionally strengthen the “ETF effect”, which will purchase ethers, further reducing the supply of this cryptocurrency on the market.
Let us also remember that further increases may ultimately be driven by the rising price of bitcoin. The reasons will be similar here: ETF purchases and another halving. The Fed may come to all this with its decision to cut interest rates.
