A crypto analyst suggests that while Ether ETFs have gained attention from Wall Street, their returns are being overshadowed by the strong performance of tech stocks, which offer better returns and multiples.
Ether Faces Tough Road to New Highs
Despite optimism from some traders, one analyst believes it is unlikely that Ether will reach a new all-time high by the end of 2024. The cryptocurrency, which has struggled to maintain a compelling narrative, is now facing stiff competition from technology stocks, which have delivered better performance.
“Ethereum lacks a strong narrative to push its price up, especially compared to other assets,” said Nick Forster, founder of Derive, a crypto derivatives platform.
Spot Ether ETFs Fail to Impress Wall Street
While the launch of spot Ether exchange-traded funds (ETFs) on July 23 captured Wall Street’s attention, it has also placed Ether in direct competition with high-performing tech stocks. According to Forster, these stocks offer better revenue potential and stronger multiples, making them more attractive.
Since the beginning of 2024, Ethereum has risen only 0.98%, trading around $2,376, based on CoinMarketCap data. In comparison, several leading tech stocks have seen far higher returns. Nvidia (NVDA) is up a whopping 122.57%, while Meta Platforms (META) has gained 49.26%, according to Google Finance.
Forster remains cautious about the future of Ether, stating, “It’s possible, but not highly likely” that the cryptocurrency will surpass its current all-time high of $4,878 by the end of 2024. Options markets place the odds at around 10%.
Major Events Could Affect Ether’s Price
For Ether to reach new highs, Forster believes three critical factors would need to align: a Trump victory in the U.S. presidential election, significant rate cuts by the Federal Reserve, and a broader rise in global financial liquidity.
However, some traders remain skeptical about these developments. Crypto trader Zen warned that a smaller-than-expected rate cut could lead to a bearish reaction, writing in a Sept. 4 post on X (formerly Twitter), “The market is adjusting prices for a potential 50 bps rate cut. If it’s only 25 bps, we might see bearish news.”
U.S. Election Could Be a Game-Changer for Ethereum
Forster also pointed out that the upcoming U.S. election in November could be a pivotal event for Ether, potentially more impactful than the approval of spot ETFs.
“There’s extra volatility implied around the election, with the potential for a 10-15% move on that day,” Forster said, adding that the market is now pricing in larger daily moves, closer to 3.5%, for Ether.
Meanwhile, other traders are still betting on a price spike. On Sept. 5, pseudonymous trader Titan of Crypto wrote on X that an upward movement for Ether is “just around the corner.” Titan of Crypto pointed to the Relative Strength Index (RSI), explaining that when the RSI nears oversold territory on the three-day chart, Ether usually experiences a rally or at least a short-term price pump.
Another trader, Yoddha, is optimistic about Ether’s long-term potential. Despite recent price consolidation, they remain confident that Ether is “getting ready for five figures.”
