Ethereum’s Potential
Crypto analyst degentrading predicts that Ethereum (ETH) will reach $6,000 by September 2024. He bases this on the increase in CME open interest and the anticipated launch of US spot Ethereum ETFs.
Factors Supporting the Prediction
- ETF Launch: The launch of spot Ethereum ETFs could unlock a large influx of capital into the market.
- Illiquidity: Ethereum’s relatively low liquidity compared to Bitcoin means that even smaller capital inflows could lead to significant price movements.
- Market Sentiment: The current bleak sentiment on Crypto Twitter is seen as a positive technical setup for Ethereum.
- Grayscale Trust Conversion: The conversion of Grayscale’s Ethereum Trust into an ETF could reduce selling pressure on ETH.
Challenges to Consider
- Cash and Carry Trades: Large funds like Millennium engage in basis trades, which could limit the impact of the ETF launch.
- Prime Broker Extinction: The extinction of prime brokers like Genesis complicates spot borrowing as a hedge against CME futures longs.
Comparison to Bitcoin
Degentrading argues that Ethereum has a higher potential than Bitcoin due to its use as a decentralized settlement layer and its appeal to traditional finance professionals.
Conclusion
While the prediction of $6,000 by September is bold, degentrading’s analysis suggests that Ethereum has significant potential for growth. However, it’s important to consider the challenges and the potential impact of cash and carry trades.
