Ether Poised for a Potential Record-Breaking Year Ahead

Ether, the second-largest cryptocurrency by market cap, has consistently been outshining bitcoin since the beginning of the year. Despite its impressive performance, Ether remains approximately 40% below its highest peak of $4,686, in contrast to bitcoin which is around 26% down from its peak of $68,990. However, industry experts predict that Ether is on the verge of setting a new all-time high this year.

Predicted Rally for Ether

A significant event for Ethereum is on the horizon with the Dencun network upgrade slated for March 13. This follows the notable Shanghai upgrade that took place in April of the previous year. The forthcoming upgrade promises to lower transaction costs on the Ethereum-based networks by dedicating storage space for data. This anticipated upgrade, in conjunction with the hopeful outlook for the approval of Ether-focused exchange-traded funds (ETFs), suggests Ether could likely surpass its historical high within the year.

Applications for spot Ether ETFs sit with the U.S. Securities and Exchange Commission (SEC), awaiting a verdict. Leading asset managers such as BlackRock, Franklin Templeton, and VanEck have all applied. Bloomberg Intelligence's ETF research analyst sees the decision by the SEC on VanEck's Ether ETF proposal as a pivotal moment, particularly on May 23, marking the ultimate deadline for the SEC's decision. On the other hand, some market strategists foresee a more probable approval of Ether ETFs in the latter part of the year.

While SEC Chair Gary Gensler has only gone as far to endorse bitcoin as a commodity publicly, Ether's status remains less defined, leading to a degree of uncertainty in its ETF journey.

The competition from other blockchain networks, such as Solana, poses additional challenges for Ethereum as alternatives boast faster and cheaper transactions.

Prospects for Smaller Cryptocurrencies

Historically smaller cryptocurrencies tend to follow the rally of their larger counterparts. Though they haven't matched the growth of the top two by market cap this year, analysts believe that a shift in momentum from bitcoin to Ether and then to altcoins is just a matter of time.

Current Crypto Dynamics

Meanwhile, the past week has seen bitcoin a marginal increase, while Ether's gains were substantially higher at 8.8%, illustrating its current strong market performance.

Ethereum, rally, ETFs