Ether, the native token of the Ethereum network, has rallied over 6% in the past 24 hours. The second-largest digital asset by market capitalisation has outperformed bitcoin in the past week.
Ether (ETH-USD) is now changing hands for $2,388, (£1,865) posting an 8% rally in the past week. Analysts anticipate positive price action from the digital asset in 2024. Forecasts are based upon the significant technological strides made by the Ethereum Foundation over the past year.
According to a recent ETC Group report, several elements could contribute to ether outperforming bitcoin in 2024. The report points to ether’s transition to a deflationary model, initiated by the Ethereum Improvement Proposal EIP-1559 in August 2021. This mechanism reduces the overall supply of ether.
Read more: Crypto live prices
Also, yields from ETH staking offer further attraction for investors. These dynamics collectively indicate a potential uptick in ether’s value in the forthcoming year. Ethereum (ETH) staking involves locking up a certain amount of ether to support the Ethereum network and validate transactions, earning ‘stakers’ additional ether as a reward for their contribution to network security. These ‘stakers’ are essentially helping to secure the blockchain by participating in the proof-of-stake consensus mechanism.
Bitcoin retraces recent gains
Bitcoin (BTC-USD) has traded flat, hovering around the $43,000 mark over the past 24 hours.
The largest digital asset by market capitalisation has dropped as much as 1.3% in the past week to now change hands for $43,100.
Read more: Bitcoin is up — and the zealots are back
Analysts anticipate the approval of a spot bitcoin exchange-traded fund (ETF) in the US within weeks. A spot bitcoin ETF is a financial product that investors hope will open the gateway for mainstream capital to flood the crypto market.
The possible approval of a spot bitcoin ETF will be made by the Securities Exchange Commission, SEC. Analysts argue that approval by the US regulatory body could lend credibility to the digital asset.
A spot bitcoin ETF could also trigger increased institutional adoption of the digital asset, and see significant investments from pension and mutual funds, potentially channeling billions into the cryptocurrency market with an approved spot bitcoin ETF.
Watch: UK faces challenges in nurturing tech startups like OpenAI | The Crypto Mile
Download the Yahoo Finance app, available for Apple and Android.
