Bitcoin is up 324% in 15 months, but there's another cryptocurrency that has all the ingredients to explode.
If you had acquired Bitcoin on New Year's Day 2023, you would now have a staggering 324% return.
Not bad for a 12 month return. Even real estate in Sydney's eastern suburbs cannot match such returns.
Is it time to fire the financial advisor who told you all cryptocurrencies are a scam? Probably not. Cryptoassets remain a volatile asset class, so you should always do your own research before investing.
But there are cryptocurrencies, like Bitcoin these days, that industry leaders think could skyrocket in price, perhaps within just a few months.
The project has been running for nine years and has garnered attention from celebrities such as Paris Hilton, Snoop Dogg and Reese Witherspoon.
We are talking about Ethereum, the second largest cryptocurrency by market capitalization.
Because some of the world's biggest asset managers, including BlackRock, VanEck, and Ark Invest, are now competing to launch spot Ethereum exchange-traded funds (ETFs), just as they did with Bitcoin. .
Bitcoin has seen a significant rise over the past six months.
It looks like that moment will come for Ethereum as well.
The U.S. Securities and Exchange Commission (SEC) is expected to make a decision in May after 11 asset management companies approved the launch of a spot Bitcoin ETF in January.
These marked a turning point for Bitcoin, whose price had been steadily rising since December 2023 in anticipation of ETF approval by 11 major asset managers.
The product allows everyday retail investors to add Bitcoin to their portfolios like stocks, while asset management companies are required to purchase the underlying asset, Bitcoin.
Applying the law of supply and demand, there are only 21 million Bitcoins in the world, and a surge in demand tends to increase upward pressure on the price.
Just two weeks ago, $3.94 billion flowed into Bitcoin ETFs over a seven-day period. In the same week, Bitcoin broke a price record in Australia, hitting an astonishing $111,440 on March 14th. This is the highest price since Bitcoin was created in 2009.
Bitcoin is currently worth $107,001 and Ethereum is trading at $5,508.
On New Year's Day of this year, Ethereum was trading at $3,400, which would represent a 55% increase, similar to Bitcoin in 2024.
Bitcoin price displayed at Pubky Bar in New York City on February 29, 2024. Photo: Michael M. Santiago/Getty Images (via AFP)
Pav Hundal, principal analyst at Australian cryptocurrency exchange Swyftx, believes that this year’s surge in Ethereum prices is “definitely partly based on ETF speculation.”
Hundal echoed a similar sentiment that high school economics can be used to predict how Ethereum might play out if the ETF is approved.
“This is Economics 101. For the price to rise, there needs to be demand and limited supply. Ethereum's supply velocity is slower than it was two years ago. If the ETF is approved, additional demand will be born,” Hundal said.
Recent data shows that the number of Australians purchasing Ethereum has increased significantly over the past year.
Adam Saville-Brown, global general manager of crypto tax software Koinly, says the company's data, which looked at the crypto portfolios of more than 1 million customers, primarily in Australia, shows that Ethereum is becoming increasingly popular with many Australians. This shows that it is becoming a preferred asset option.
“Last year's data shows Ethereum holdings in Australian wallets consistently increasing quarter-on-quarter, highlighting the growing confidence in Ethereum as a long-term investment,” Saville said.・Mr. Brown declares.
As with most investment speculation, estimating the price of cryptocurrencies is difficult because there are many factors involved. While approval of an ETF could push prices higher, disavowal could certainly have the opposite effect.
Hundal offered a potential price range, but said: “Until May, all bets are basically off.”
“Today’s trading pattern suggests that Ethereum could price between A$8,730 and A$11,180,” he says.
Interest in Ethereum is surging in Australia. Photo: AFP
Meanwhile, Adrian Przerozny, CEO of Australian crypto exchange Independent Reserve, explains that while there are many factors that influence the price of cryptocurrencies, hype remains a factor. .
“Whenever more money flows into the market and prices tend to rise. “I've seen situations where people pay attention,” Przerozny said.
Przerozny clarified that while it may be tempting to focus on the short-term gains of cryptocurrencies, adopting a long-term perspective is a wiser approach.
“It's very difficult to predict what the market will do next week or next month,” he said. “But if you zoom out a little bit, there are trends that are already there, and there's good reason to believe that these trends will continue. But of course, there will be ups and downs along the way.”
Disclaimer: The content provided is for informational purposes only. Please do not consider the above information as investment, financial or other advice. It is essential that you do your own research before making any investment decisions.
Ciaran Lyons is a cryptocurrency market analyst, journalist, avid investor, and former national radio host. He is a regular contributor to global cryptocurrency publications, and he was one of five Australians to appear in his latest SBS series, Filthy Rich and Homeless.
