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Ethereum Hits 22-Month High, Nears $3,200 as Market Awaits Dencun Upgrade

Ethereum's surge in value highlights investor optimism ahead of Dencun upgrade.

Tue, 27 Feb 2024, 11:29 am UTC

Ethereum continues to assert its dominance in the cryptocurrency market, firmly holding its position as the top coin. With its market cap trailing only behind Bitcoin, ETH has surged to 22-month highs as of Monday, indicating a significant upward trend in its value.

Strong Performance and Market Dynamics

According to CoinGecko data, ETH is currently priced at $3,151, showcasing a remarkable breakthrough past the $3,000 milestone last week for the first time since April 2022. Over the past 24 hours alone, ETH has experienced a 3.5% increase, with its value rising by more than 8% throughout the previous week.

Dessislava Aubert, an analyst at Kaiko, highlighted that open interest in ETH has reached a multi-year high of $7.7 billion, coupled with funding rates soaring to their highest levels since early January. This surge indicates a notable influx of new capital, driven by increasing speculative interest and hedging strategies.

Anticipated Network Upgrade

In addition to its impressive market performance, Ethereum's network is gearing up for a crucial upgrade scheduled for the upcoming month. Dubbed "Dencun," this upgrade addresses scalability issues within the blockchain.

According to Decrypt, introducing "proto-danksharding" with this upgrade promises to enhance the network's speed and affordability through layer 2 solutions. These solutions, known as L2s, streamline unverified transactions on Ethereum, process them externally, and relay confirmations back to the mainnet, thereby improving overall efficiency.

Institutional Interest and Regulatory Outlook

Notably, a wave of traditional Wall Street firms eagerly awaits approval for an Ethereum exchange-traded product (ETP). This move would facilitate Ethereum's accessibility to mainstream investors, with major players like BlackRock, VanEck, and Grayscale among those awaiting regulatory approval.

According to Block, Coinbase, a publicly traded crypto exchange, supported Grayscale's Ethereum ETF bid through a comment letter submitted to the Securities and Exchange Commission (SEC).

Despite the bullish momentum, ETH still trails its all-time high of $4,878, reached in November 2021. However, experts, including British multinational bank Standard Chartered, anticipate that the approval of a spot ETH ETF by May could propel ETH's price above $4,000 per coin, further solidifying its position as a leading digital asset.

Photo: Traxer/Unsplash

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