Many positive factors in January drove the price of Ethereum to soar, driven by buying pressure.
The price of Ethereum experienced a surge before the expected catalyst for an upward trend in January, prompting investors to buy this cryptocurrency. Data shows that Ether has recently risen by 6% and has increased by 95% since the beginning of the year. Meanwhile, Solana's SOL token has seen an increase of 82%. Two key events in January have caught the attention of investors: the "Dencun" upgrade of Ethereum and the progress of the U.S. Securities and Exchange Commission (SEC) potentially approving a Bitcoin spot exchange-traded fund (ETF). Investors are optimistic that the approval of a Bitcoin spot ETF could have a positive impact on an Ethereum spot ETF.
Zhitong App has learned that on Wednesday, the price of Ethereum surged as investors rushed to buy this cryptocurrency before the expected key catalysts in January. According to data from Coin Metrics, Ether has recently risen by 6%. Solana's SOL token is one of the best-performing cryptocurrencies this year, with a 2% increase. Ethereum has lagged behind SOL throughout 2023. This month, it has risen by about 15%, while the increase in SOL token is 82%. Year-to-date, Ethereum has risen by 95%, while SOL has skyrocketed by over 980%.
Analyst John Todaro from Needham stated, "We believe this is due to...the Ethereum ecosystem shifting back from other layers to Ethereum. The performance of Solana, Avax, and others has exceeded Ethereum, and now Ethereum is catching up in the rotation."
Matt Maximo, Senior Research Analyst at Grayscale Investments, said that Ethereum's rise on Wednesday "indicates that the market is finally turning towards Ethereum-centric trading, although this may not fully materialize until a US spot Bitcoin ETF receives proper regulatory approval. Ethereum's on-chain activity remains very strong, so I believe it's not a matter of 'if' but 'when' Ethereum will catch up."
Investors are focusing on two key events in January. The first is Ethereum's "Dencun" upgrade, expected to take place around January 17th. Maximo pointed out that this is to reduce costs associated with Ethereum's Layer 2 solutions. Investors have also been closely watching the progress of the US Securities and Exchange Commission (SEC) potentially approving a Bitcoin spot exchange-traded fund (ETF). The decision is widely expected to be made in January next year. Todaro said that some investors are optimistic that if a Bitcoin spot ETF is approved, it could be a good sign for the potential of an Ether spot ETF.