Ether, the cryptocurrency that trades on the ethereum blockchain platform, is the second-largest digital token, behind only bitcoin. It has the potential to cement that status.
Fresh off a recent network upgrade, ethereum is catching the eyes of some cryptocurrency analysts. A potential near-term rally by ether could be beneficial to ETFs such as the VanEck Ethereum Strategy ETF (EFUT). The actively managed EFUT, which debuted last October, provides investors with exposure to the cryptocurrency’s futures contracts, indicating it could be a useful vehicle for market participants looking to capitalize on the digital currency’s short-term moves.
As of late Thursday, ethereum sported a market capitalization of around $465.4 billion and traded around $3,880. The cryptocurrency has benefited this year in part from speculation that the SEC could eventually approve spot ether ETFs. As bitcoin fans know, there are no guarantees on that front. Fortunately, there are other catalysts underpinning the EFUT thesis.
Ethereum Could Be Ready for Near-Term Rally
Cryptocurrency analyst AM Crypto noted the digital currency’s recent price action suggest that a move to $4,300 or even $4,500 could be in the offing. For now, EFUT and ether itself could be support by ethereum staying around current levels while not falling victim to a significant correction. If that happens, a move to $4,085 could materialize, noted AM crypto. From there, a flirtation with $4,600 is possible.
Much like the upcoming bitcoin halving, the ethereum network upgrade is also viewed as a potential catalyst for the cryptocurrency.
“The analyst believes that once the upgrade is implemented, Ethereum’s ecosystem will benefit from reduced costs and increased efficiency, likely driving further price appreciation,” reported Anjali Belgaumkar for Coinpedia.
EFUT could offer investors other advantages. A slew of altcoins, some of which have credible usage cases and some of which are posting strong recent gains, trade on the ethereum platform. The success of those altcoins could be constructive for the ethereum network and thus ether prices.
“Beyond Ethereum, AM Crypto spoke about the broader cryptocurrency market’s potential, especially in altcoins closely associated with Ethereum’s ecosystem. Layer-two tokens like Polygon (MATIC), Arbitrum, Optimism, and others were identified as potential high-growth assets,” noted Coinpedia.
EFUT does not directly invest in ethereum. But its C-corp structure could provide tax efficiencies relative to other futures-based exchange traded products.
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