Ether, the second-largest cryptocurrency behind only bitcoin, followed its bigger counterpart lower when digital currencies were slammed earlier this month. As of late Monday, it resided below the psychologically important $2,700 area despite having surged more than 10% over the prior week.
There are, however, some encouraging signs in the ether market. If those continue emerging, they could bear fruit for the newly minted spot ether ETFs. Those include the VanEck Ethereum ETF (ETHV). The fund is less than two months old and already has about $65.5 million. That indicates there’s appetite among ETF investors for cryptocurrencies beyond bitcoin.
One positive sign of late for ether and ETHV is that despite data confirming a spate of outflows from the digital currency, data points confirm that some sizable ether devotees, also known as “whales,” have been wading back into the market. As is the case with bitcoin, ether whale activity is widely tracked. And it can be instructive regarding near-term price trends.
Just One Ether Buyer, But …
According to Scopescan data, an ether wallet that fits the bill as a whale holder recently scooped up 5,000 of the tokens at an average cost of roughly $2,500, representing a purchase of $12.8 million. That could prove relevant to investors considering ETHV and related ETFs. That’s because, as the research firm notes, the last time that address bought the digital currency for size was when the cryptocurrency traded around $2,100. Following that whale’s buying spree, ether surged to $3,100.
Of course, history isn’t guaranteed to repeat, but it often rhymes. And it cannot be overlooked that the aforementioned whale was buying the cryptocurrency around $2,500 and the digital currency traded around $2,680 at this writing. That means that investor is well into the green on their new position.
For now, consensus appears to be building that ether needs to surpass $2,700 to force short covering and stoke renewed interest. From there, a run to $3,100 could be possible. As for ETHV, it could be an appropriate idea for investors willing to take a long-term view of ethereum.
“As to ether’s viability as an investment, ether is a cryptocurrency that should continue to garner investor attention. Ethereum is a major platform that operates using ether as its cryptocurrency. Ether’s $420 billion market cap was second only to bitcoin’s $1.3 trillion market cap as of July 19, 2024. No other cryptocurrency was particularly close to its size,” noted Morningstar analyst Bryan Armour.
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