Ethereum (ETH) may be geared up for a potentially stellar 2024. While it lagged behind Bitcoin (BTC) last year, a number of factors are now pointing towards a bright future for the leading smart contract platform. Here are a few key reasons that may be the basis for this newfound optimism:
Dencun Takes Center Stage
This highly anticipated upgrade, currently undergoing testing, is expected to revolutionize Ethereum’s scalability. Let’s understand the concept with a simplified explanation.
Imagine tiny data packages called blobs attached to transactions, taking the pressure off the main network. These blobs will hold temporary transaction data, thereby allowing the network to focus on verifying their correctness only instead of every minute detail. The result will be smoother, faster transactions, while some experts are also predicting fee reductions of up to 90%!
ETF Spotlight Shines on ETH
Another pertinent factor is the recent approval for Bitcoin spot ETFs in the US by the Securities and Exchange Commission, which has investors talking about similar possibilities for Ethereum.
Last week, the news about the Bitcoin ETF had a positive impact on Ethereum. Ethereum’s price briefly went above $2,700, the highest since May 2022. There is even more optimism for the near future of ETH because some companies, like VanEck and BlackRock, behind the bitcoin ETFs, are planning to introduce Ethereum-based spot ETFs.
If this becomes a reality, you will be able to invest in ETH without the hassle of owning and managing the cryptocurrency itself. This could release a wave of institutional and retail money, which would ultimately lead to ETH’s price soaring.
Institutions Flock to Ethereum
Unlike Bitcoin’s recent dip into smart contracts and NFTs, Ethereum has been the undisputed king for years. Its established developer community, strong infrastructure, and thriving user base make it an attractive prospect for institutions looking for exposure to the booming DeFi and NFT markets. Plus, staking your ETH earns you rewards, an aspect that adds another layer of appeal.
The Supremacy of Smart Contracts
While Bitcoin is trying its hand at smart contracts, Ethereum remains the undisputed frontrunner in this area. The fact that it has a head start, features a larger user base, and offers a wider range of applications gives it a clear advantage. Think of it as the iPhone of smart contracts, with Bitcoin still playing catch-up.
Ethereum’s Rise in Value
Ethereum has a secret weapon: its burning mechanism. A portion of transaction fees are permanently removed from circulation, making ETH a scarcer asset over time. This scarcity, like a limited edition collection, is likely to drive up its value in the long run.
Final Word
While there are various challenges, the future seems bright at present. Ethereum is not all sunshine and rainbows, as high gas fees and network congestion are still hurdles it needs to overcome. However, the Dencun upgrade and a growing institutional interest present a promising picture for the future. If you are looking for a piece of the DeFi and NFT pie, keep your eyes on Ethereum in 2024, and you may just be able to leverage the opportunity.
Celine Brooks is a renowned journalist and author specializing in cryptocurrency and blockchain technology. She holds a Master’s degree in Economics from Harvard University and is very passionate about Crypto. Celine regularly hosts webinars and workshops, sharing her insights and forecasts about the evolving digital currency landscape. She is also an active contributor to several leading financial and tech publications, where she breaks down complex crypto trends into understandable insights for everyday investors.