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An Ethereum Comeback?

By JenkaJ | Jenkas Crypto Musings | 29 Feb 2024


Ethereum has struggled lately, not only has it been out-performed by Bitcoin, but it's also been getting out-performed by other Layer 1's like Solana and Avax.  The reasons for this I think are pretty clear...

Wen Scalability?  Ethereum has had a problem with scalability for years, which has pushed the gas prices up when the chain gets busy.  Ethereum is now as famous for it's high gas prices as it is for anything else, and even the Ethereum Devs have said that you shouldn't be transacting on the layer 1 and instead be using the various layer 2's available.  Historically when Bitcoin pumps and then consolidates, people would switch their BTC into ETH for the catch up bid.  However, lately people have been switching straight to the layer 2 coins like OP and ARB and other layer 1's like Solana instead.

Bitcoin ETF.  Most crypto investors will allocate a certain percentage of their portfolios to BTC & ETH, usually this would be split somewhere down the middle.  The last year has seen the crypto news cycles dominated by the Bitcoin ETF's.  This led a lot of investors and traders to have their full allocation in BTC and leave ETH out.

Despite this, I see the Ethereum bid as the most intriguing right now, and I personally see ETH having a very strong comeback in 2024.  My thinking behind this is as follows...

Perfectly timed updates.  The next few Ethereum updates couldn't of been timed better, with the next one scheduled for March.  The Bitcoin ETF news will start to die down a little, BTC price will probably consolidate sideways for a while and Ethereum's update will bring it back into the news cycles giving it much needed exposure.  The next few updates are all focused on... you guessed it.. Scalability!

Wen Ethereum ETF?  With the Bitcoin ETF's being approved and so far very popular and successful, it's inevitable that talk of Ethereum ETF's will gather pace.  Although approvals are by no means a forgone conclusion, I think many investors and traders will start to bid on ETH to get in early (who doesn't love a gamble?).  This again will keep Ethereum in the crypto news cycles, which means more exposure.

With all this exposure I think ETH will have a strong rally towards the end of 2024 and into 2025.

And just to add some context, I am not a very big fan of Ethereum and do not own any yet.

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Jenkas Crypto Musings
Jenkas Crypto Musings

This blog will talk about my thoughts on all things crypto related.

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