Ether, the second-largest cryptocurrency, is struggling to match the performance of bitcoin, despite commanding less than a fifth of the $2.7 trillion crypto market, Reuters reported on Tuesday.
In the first quarter of this year, ether’s value increased by around 53 per cent, compared to bitcoin’s 65 per cent.
Bitcoin reached new highs last month, while ether, trading at about $3,612 on Monday, remains 26 per cent below its all-time high of $4,867.60 from November 2021.
A recent technical upgrade to the Ethereum blockchain, aimed at reducing transaction fees, had little impact beyond the crypto community. This contrasts with the anticipation surrounding bitcoin’s upcoming halving event, a technical adjustment expected to slow the coin’s supply.
Following the Ethereum blockchain’s Dencun upgrade on March 13, ether’s value fell by 12 per cent. Joseph Edwards, head of research at Enigma Securities, noted that Ethereum continues to struggle with name recognition among non-specialist investors.
The future of ether largely depends on whether the US Securities and Exchange Commission (SEC) approves spot ether ETFs. The approval of several US-spot bitcoin ETFs previously stimulated institutional demand and drove bitcoin to record highs. Ether ETFs are also awaiting approval, with VanEck’s filing due for a decision on May 23.
Standard Chartered Bank anticipates that US ether ETFs will be approved on May 23, potentially driving ether’s value to $8,000 by the end of 2024 and $14,000 by the end of 2025.
