Ethereum has outpaced Bitcoin for reasons beyond the possible approval of spot Ether exchange-traded fund (ETF), explain Bernstein analysts Gautam Chhugani and Mahika Sapra in a report.
This is marked by Ethereum achieving a 33% increase in value since the year's onset.
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The report anticipates further growth in the Ethereum ecosystem, driven by clearer token regulations and innovations in token economic designs.
An additional factor is the upcoming Dencun upgrade scheduled for March 13, which is promised to significantly reduce fees in Ethereum Layer-2 networks and improve their profitability.
Central to Ethereum's success is its transition from Proof-of-Work to Proof-of-Stake. The analysts emphasize that the supply of Ethereum has remained stable since this pivotal change.
The report also highlights the decreasing presence of Ethereum on crypto exchanges, now at a record low of 11%, indicating a trend where more Ethereum is being locked up.
The analysts point out:
With the growth of ETH transaction fees based on higher blockchain activity, more ETH holders are incentivized to stake their ETH.
Moreover, the emergence of new protocols like EigenLayer, facilitating the restaking of Ethereum, has also played a role by introducing new tokens and services, thereby attracting additional staking demand.
These developments have created a robust foundation for Ethereum, indicating a promising future for its holders and the broader cryptocurrency market.
In other news surrounding Ethereum, its value recently exceeded $3,000 for the first time since April 2022.
