- CryptoQuant analysts suggest Ether could surpass US$5,000 due to strong institutional demand and increased network activity.
- After rejecting a proposal to add Bitcoin to its balance sheet, there’s growing speculation about Microsoft investing in Ethereum ETFs.
- While staking could lower Ethereum ETF management fees and enhance competitiveness against Bitcoin ETFs, SEC restrictions currently block this development.
CryptoQuant has released a report stating that Ethereum’s ETH could reach over US$5K (AU$7.8K) thanks to institutional demand and network activity.
According to the firm, inflows on spot Ethereum exchange-traded funds (ETFs) have “broken records” as investors pumped over US$1.9B (AU$2.98B) into the funds in the last 13 days, bringing total net assets to US$13.18B (AU$20.69B), according to data from SoSo Value.
Related: Bitcoin Reclaims $100K Amid Optimistic CPI Data and Cautious Fed Stance
Moreover, Ethereum has noted increased activity as total daily transitions now average between 6.5 and 7.5 million for most of the year. In 2023, this figure rounded to 5 million per day.
The report reads:
Based on valuation metrics, ETH could be heading above $5,000 if current demand and supply dynamics continue (…) Higher network activity on Ethereum signifies increased usage and demand for the network’s capabilities, reflecting growing adoption of decentralized applications.
CryptoQuantMicrosoft Rejects Bitcoin, Considers Ethereum
Microsoft is apparently open to investing in Ethereum ETFs, which comes as a major blow to Bitcoin maximalists like Michael Saylor.
This is just speculation, however, that started with Matthew Sigel, VanEck’s head of digital assets research, who said on in X post that Microsoft might consider investing in an Ethereum ETF if it includes staking features.
This possibility was suggested following comments by Microsoft CFO Amy Hood during the company’s annual shareholder meeting, where the Bitcoin proposal was overwhelmingly rejected (less than one percent of shareholders voted in favour. That’s a harsh rejection).
Hood emphasised that Microsoft has been accepting cryptocurrency payments since 2014 and considers crypto an asset class, but its investment priorities are centered on liquidity, capital preservation and income generation.
Staking, Ethereum ETFs’ Missing Piece
Yet that may be more complicated, given that the Securities and Exchange Commission (SEC) demanded that Ethereum ETFs exclude staking features primarily due to regulatory and compliance concerns. And why? Simply because the SEC views staking services as constituting unregistered securities offerings. Classic SEC.
While this view could change under a new SEC administration, it still would be complicated for the SEC to allow staking services as a new regulatory framework would be needed. Moreover, current spot Ethereum ETFs process redemptions in 24 hours, but staking often involves lock-up periods.
Related: Citi Report Highlights Stablecoins’ Role in Strengthening US Dollar
But in general terms, integrating staking services into Ethereum ETFs would be a massive advantage, mainly because it could significantly lower management fees, making them more attractive to investors by combining income generation with minimal costs.
Also, analysts suggest this could enhance Ethereum ETFs’ competitiveness against Bitcoin ETFs, which currently dominate the market. For instance, Nate Geraci, president of the ETF Store, predicts that Ethereum ETFs with staking capabilities are a question of “when, not if”.
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