Ether (ETH) has seen a significant 58% price increase in the last month, outperforming the overall cryptocurrency market by 14%. Although Ether has struggled to maintain levels above $4,000, it has reached its highest price in over two years, narrowing the gap with Bitcoin (BTC).

Is the surge in Ether’s price driven by optimism surrounding the potential approval of a spot Ethereum ETF?

Some traders believe that Ether’s recent bull run is closely tied to the speculation around the approval of a spot Ethereum exchange-traded fund (ETF). This anticipation could lead to a “sell the news” scenario if the event becomes fully priced in, particularly in the initial weeks. The U.S. Securities and Exchange Commission is set to make a final decision on this matter by May 23, with approval odds estimated at 35% by Bloomberg analysts.

In addition to the ETF speculation, other factors contributing to Ether’s price surge include the upcoming Dencun network upgrade scheduled for March 13. This hard fork is expected to significantly reduce transaction fees on the Ethereum network, addressing a long-standing issue. Currently, the average Ethereum transaction fee has remained at $4 or higher since November 2023.

Despite Ether being 19% lower than its peak in November 2021, it boasts a market cap of $480 billion, placing it among the top 20 global tradable assets. This market cap surpasses that of companies like UnitedHealth and ExxonMobil, underlining Ether’s market significance.

Investors in Ether can earn a 4% yield by participating in the network’s proof-of-stake consensus mechanism. However, the demand for ETH largely hinges on the ecosystem’s activity. As the Ethereum ecosystem grows, the demand for ETH increases as it is required for validating transactions and processing transactions on the network.

Recent data indicates the Ethereum network’s dominance, especially when layer-2 solutions are considered. The network has seen consistent growth across major decentralized exchanges and aggregators, although nonfungible token marketplaces have shown slightly disappointing performance. Pro traders remain bullish on Ether, but the presence of excessive leverage in the market poses a risk of a potential sell-off if Ether fails to break above $4,000.

In conclusion, while the future of Ether’s price remains uncertain, it is essential for investors to monitor market developments closely. Stay informed with the latest news and updates on Global Crypto News to make informed investment decisions.

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