In the world of technology, to stagnate is to court failure. Technology is an ever-evolving, nebulous thing that has no actual finish line. Any piece of technology must be in constant flux, of self-improvement, to not be vastly outdated quickly.
It makes perfect sense that cryptocurrencies are an ever-evolving subset of technology. No form of cryptocurrency is undergoing as substantial of an evolutionary period right now as Ethereum, which is introducing some significant changes that could ultimately pave the way forward for cryptocurrency itself.
The current ETH to USD price of Ethereum is $2,615.33 per ETH. With a circulating supply of 120,279,194.95 ETH, this means that, as of August 16, 2024, Ethereum has a total market cap of $314,927,872,822.66. The amount of Ethereum traded has risen by $494,203,672.39 in the last 24 hours, a 3.09% increase, a promising sign of growth amidst many difficulties for Ethereum and cryptocurrency. Further showcasing the liveliness of cryptocurrency on the rise is that in just the last 24 hours, $15,972,869,432.44 worth of ETH has been traded.
Ethereum is a decentralized computing platform that uses ETH to pay transaction fees. Developers can use Ethereum to run decentralized applications and issue new crypto assets, known as Ethereum tokens.
Ethereum, the second-largest cryptocurrency by market capitalization, was created with a vision to leverage blockchain technology beyond financial transactions.
Ethereum was initially created by programmer Vitalik Buterin in 2013 before being publicly launched in 2015.
Whereas many other forms of cryptocurrency have their origins traced back to financial purposes, Ethereum’s first purpose was to serve as a platform for decentralized applications. This concept and intent were further outlined in its whitepaper, published in 2013. The whitepaper introduced this new technology and its potential applications to the rest of the tech world and efficiently and effectively laid the foundation for what would become one of the most successful cryptocurrencies on the market.
However, Ethereum and cryptocurrency have recently run into unexpected troubles. Near the beginning of August, on a day known as ‘Red Monday, ‘ the crypto market value took a ginormous hit, sending the entire community reeling. As a result, Ethereum’s price has been declining overall.
Whether looking at a comparison point of the last day, the previous week, or the last year, the price of Ethereum overall has declined on every count.
The current value of 1 ETH is USD 2,615.33. Inversely, USD 1.00 would allow you to trade for 0.000382 ETH.
The exchange rate has increased by 0.76% in the last seven days. Meanwhile, in the previous 24 hours, it changed by 0.29%, which means that the highest exchange rate of 1 ETH to the United States Dollar was 2675.645 USD, and the lowest 24-hour value was 1 ETH for 2517.46 USD. This time last month, the value of 1 ETH was USD 3,420.38, a 23.54% increase from where it is now. Looking back a year, Ethereum changed by USD 810.30.
Another factor in the evolution of Ethereum’s value is the introduction of Spot Ethereum exchange-traded funds, which recently began on July 23, 2024. This highly anticipated launch was initially poised to drive outsized gains in Ether’s price. Multiple high-up sources predicted this and believed that overall, crypto-market traders could even be underestimating the full impact this would have on Ethereum’s value.
As of the following Friday midafternoon trading, Ether had declined 1.3% in value from a month prior.
In May, the US Securities and Exchange Commission approved essential regulatory requirements from prospective issuers of ETF investing directly into the Ether. But sadly, it’s not as simple as saying and doing. The regulator still needs to approve the applicants’ S-1 registration filings for the products to go live officially. Several investment giants, such as BlackRock, VanEck, and Ark Investment Management, are banking on being the pivotal first-mover advantage in introducing a spot ETH ETF.
“The launch of an ETH ETF would be a boost of validation to the crypto ecosystem at a time when the industry is trying to judge the potential impact of US elections later this year,” said Darius Tabai, CEO of Vertex and former trader at Merrill Lynch and Credit Suisse.
He said that Ether’s status as the leading smart contract platform in the crypto world means any post-approval price gains would likely more directly impact the decentralized finance ecosystem. “If a move is sustained, I would expect more of a potential halo effect in contrast to the launch.”
Recall the January event when Spot BTC ETFs debuted in the US. Since then, the price of Bitcoin has increased at an astonishing rate of over 40%, a move partly driven by strong and persistent inflows into such products.
There are vital parallels and differences between the spot BTC and ETH launches. While BTC spot ETF inflows hit a higher-than-expected ~$60 billion target in the US this year, it has been anticipated that ETH ETF inflows will reach approximately 30% of BTC’s total market size, or ~$20 billion+ at current prices.
Inflows into ETH ETFs could amount to more than $20B in the initial months post-launch, as they are expected to result in higher pricing sensitivity relative to BTC.
Once cleared for trading, Ether-holding funds will likely attract slower demand than spot BTC peers, partly due to the ETF’s lack of an ETH staking feature. While inflows are likely to support Ether’s price, outflows from the Grayscale Ethereum Trust could initially pressure the currency’s value downward. Initially, a similar downward turn occurred with Bitcoin, with 6.5 billion USD outflows from Grayscale in the first month.
As many specialists have noted, the fact that Ethereum ETFs will not offer staking rewards to investors may also limit their appeal to the broader market.
Overall, the introduction of Spot Ethereum ETFs came at an essentially troublesome time for cryptocurrency. Only a week after its introduction, ‘Red Monday’ occurred, making it incredibly difficult to judge the relative success of the introduction thus far. However, the market and value of Ethereum are beginning to bounce back in promising ways, and ETFs may be an excellent help for Ethereum moving forward.
