Despite the impending approval of a spot Ethereum ETF, Grayscale experts believe the reason behind the recent price increase is upcoming technological improvements.
Grayscale research analyst William Ogden Moore said in a February 23 report that Ethereum’s Dencun upgrade likely triggered an increase in the price of Ethereum (ETH). According to data from CoinMarkerCap, ETH is up 34% in the past 30 days and 28% year to date, according to TradingView.
Grayscale Research Analyst William Ogden Moore said,
“Ethereum’s Dencun upgrade, scheduled for March 13, 2024, is a big step forward that could help Ethereum compete in scalability with faster chains in the smart contract platform crypto space such as Solana ) to compete. We believe recent price performance reflects market expectations for this upgrade."
Dencun promises to increase throughput and reduce transaction costs, allowing users to spend less gas fees and conduct more transactions on ETH’s mainnet and layer 2 scaling solutions like Arbitrum.
The developers plan to implement this key overhaul by introducing data blobs through raw danksharding.
Moore’s report suggests that Ethereum could capture a greater share of the smart contract business from competitors like Solana if the network could offer cheaper fees. Moore believes this could unlock a multi-billion dollar market tied to real-world assets.
Grayscale Research Analyst William Ogden Moore added,
“If Ethereum can become more competitive in terms of throughput and cost, it could position itself to capture smart contract applications that require high levels of security and censorship resistance, such as stablecoins or tokenized financial assets. "
Grayscale’s bullish outlook on ETH and its blockchain complements the investment firm’s bid for spot exchange-traded funds following its successful conversion of GBTC last month. The company hopes to do the same with its Grayscale Ethereum Trust (ETHE), which has more than $7 billion in assets under management (AUM), Yahoo Finance reported.
The SEC joined several other issuers in delaying a decision on Grayscale's filing until May.
