Featured image from Unsplash, chart from Tradingview.com<\/div>\n","protected":false},"excerpt":{"rendered":"
Ethereum (ETH) now offers an attractive risk-reward ratio, according to analysts at research and brokerage firm Bernstein. Despite underperforming compared to other major cryptocurrencies like Bitcoin (BTC), Solana (SOL), and XRP for most of 2024, Ethereum\u2019s strong fundamentals may set the stage for a potential rally. Why Is Ethereum Struggling? Bernstein Analysts Explain\u00a0 Ethereum, the second-largest cryptocurrency with a market cap exceeding $430 billion, may be on the verge of significant positive price action. Bernstein analysts suggest that ETH\u2019s fundamentals remain strong despite its underperformance, making it an appealing investment opportunity. To put Ethereum\u2019s performance into perspective, on a year-to-date (YTD) basis, Bitcoin and Solana have surged 125% and 122%, respectively, while ETH has only managed a 57% increase. In a client note shared today, analysts led by Gautam Chhugani highlighted several factors contributing to Ethereum\u2019s struggles. One issue is that ETH has not established itself as a store of value to the same extent as BTC. Additionally, the leading smart contract platform faces increasing competition from low-latency Layer 1 blockchains such as Solana, Sui, and Aptos. Related Reading: Ethereum Accumulation Rises As 70% Holders Are In Profit: What It Means For ETH Price? The note also pointed out that Ethereum\u2019s reliance on Layer 2 blockchains, including Optimism, Arbitrum, and Base, often redirects users away from Ethereum\u2019s main chain. This hampers user retention and limits transaction fee growth, creating a headwind for ETH\u2019s price momentum. Is Now The Right Time To Buy ETH? Bernstein analysts argue that Ethereum\u2019s outlook could improve substantially, particularly in light of Republican presidential candidate Donald Trump\u2019s recent election victory. Following Trump\u2019s win, the total cryptocurrency market cap has surged over 45%, surpassing $3.5 trillion. Ethereum has been one of the biggest beneficiaries of this rally, gaining 46% since the election compared to Bitcoin\u2019s 41% and Solana\u2019s 36%. The analysts also noted key developments that could support Ethereum\u2019s growth moving forward. They highlighted the increasing likelihood of staking yield approval in Ethereum exchange-traded funds (ETFs) under a Trump-led, crypto-friendly Securities and Exchange Commission (SEC). The analysts explained: We believe, under a new Trump 2.0 crypto-friendly SEC, ETH staking yield will likely be approved. The analysts added that Ethereum\u2019s current yield rate of 3% could increase to as high as 4% to 5%, which could be an attractive yield rate for investors in a declining interest rate environment. Further, the recently observed growth in Ethereum ETFs in the form of higher inflows could benefit ETH. Although ETH ETFs had a lukewarm launch, they have recently outperformed Bitcoin ETFs in daily inflows. For instance, on November 29, spot ETH ETFs in the US attracted $332.9 million in inflows, compared to $320 million for Bitcoin ETFs. Related Reading: Ethereum Spot ETFs Attract Record $295 Million Daily Inflows \u2013 Is ETH Set For New Highs? In addition, Ethereum\u2019s transition to a proof-of-stake (PoS) consensus algorithm in September 2023 and the protocol\u2019s burn mechanism have stabilized ETH\u2019s total supply around 120 million. Of these, about 28% is tied in staking contracts while roughly 10% is in lending protocols or Layer 2 bridges. With a high proportion – close to 60% – of total ETH supply unmoved in the past year, the analysts at Bernstein believe the digital asset might benefit from favourable demand-supply dynamics. At press time, ETH trades at $3,644, down 1.8% in the past 24 hours. Featured image from Unsplash, chart from Tradingview.com<\/p>\n","protected":false},"author":619,"featured_media":656344,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[89518],"tags":[134,428,1119,1558,15385,8480,8323,4854,1946,10384,78803,3799],"class_list":["post-656337","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ethereum-news","tag-altcoin","tag-bitcoin","tag-btc","tag-cryptocurrency","tag-digital-asset","tag-donald-trump","tag-eth","tag-ether","tag-ethereum","tag-ethereum-etf","tag-ethusdt","tag-sec"],"acf":[],"yoast_head":"\n
Ethereum Risk-Reward Ratio Is Now Attractive, Brokerage Firm Explains<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n \n\t \n\t \n\t \n