Cryptocurrency is flourishing in 2024 as evidenced by the growing influx of capital into the market overall. Roughly $230 billion dollars of capital has found its way into the crypto market since the beginning of 2024. That influx has raised the market capitalization to levels approaching $2 trillion overall.
Investors who fear oversaturation should placate themselves with the fact that market capitalization approached $3 trillion in late 2021: there is substantial room for further growth.
Further, cryptocurrency is becoming more and more ingrained in the financial system seemingly by the day. It is much less the realm of scams that it used to be and more and more part of the mainstream.
Ethereum (ETH)
Ethereum (ETH-USD) ETFs are still coming in May which is all investors should care about. There is still ample reason to believe that ETH prices will rise substantially as a result.
The SEC recently delayed a joint spot Ethereum ETF application filed by Invesco and Galaxy Digital. Analysts close to the market were unfazed by the decision and expect other similar decisions to occur moving forward. Those analysts remain stalwart in their belief that the May 23 date is the only one that matters. That is the final deadline date for VanEck and it is expected to be approved.
Importantly, analysts believe that Ethereum prices could rise by 70% or more in the run-up to that date. Investors should rightly anticipate that similar price action to Bitcoin could befall Ethereum around that date. There was a strong sell-off in early January as the first Bitcoin ETFs were approved. Investors were eager to secure gains. However, those prices have since risen from $46,000 above $52,000.
Solana (SOL-USD)
Solana (SOL-USD) is the most noted of the Ethereum layer 2 solutions. That group of cryptocurrencies is receiving attention now precisely as interest ramps up around Ethereum.
Investors have seen positive results from the introduction of Bitcoin ETFs. It is clear to those investors that the introduction of ETFs has the power to propel cryptocurrency prices higher. Those investors are preparing for similar activity surrounding Ethereum ETFs. Of course, layer 2 Solutions will be garnering a lot of attention and Solana is the best known of those.
Solana co-founder Anatoly Yakovenko believes that most layer 2 scaling Solutions will fall by the wayside in time. He is of course biased in believing that Solana will not be among them. However, the greater cryptocurrency Market seems to agree with him given the price levels that Solana is capable of sustaining.
It’s logical that Solana should increase as the reality of Ethereum ETFs becomes more and more likely. It’s a simple thesis but simple ideas often make the most sense.
Bitcoin (BTC-USD)
A year ago Bitcoin (BTC-USD) was worth approximately $20,000. As I write this, it’s worth more than $52,000.
Part of the reason for that resurgence in price has to do with the recent Bitcoin ETF approval. In their short lives, the nine approved Bitcoin ETFs have scooped up nearly 700,000 BTC valued at more than $34 billion. Bitcoin continues to distance itself from the realm of scams and more deeply into the realm of legitimate financial instruments. SEC approval of Bitcoin ETFs has gone a long way in calming more conservative skeptics. In turn, that should lead to a continued influx of liquidity and capital overall.
Investors shouldn’t rely on Bitcoin ETF approval alone as a catalyst for future upward momentum. Remember, the next Bitcoin halving is scheduled for April. That will cut the reward for successfully mining a block in half. Thus, increasing scarcity overall through supply-side economics should raise the price again.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
