Ethereum's High Rise, Altcoin Market Expectations Rising

The recent large-scale capital inflow from institutional investors and expectations of the U.S. financial authorities' resolution of securities risks have led the price of Ethereum (ETH) to break through the all-time high on the domestic virtual asset exchange Bithumb. It is analyzed that if the good news for ETH, which has been underperforming compared to Bitcoin (BTC) and other altcoins this year, continues, other altcoins (virtual assets excluding BTC) will also benefit.





On the 18th, based on Bithumb, ETH recorded 5,895,000 won at one point the previous day, surpassing the previous high (5,884,000 won) achieved in December 2021. ETH was traded at 5,681,000 won, up 32.3% from the previous month, at 10 am on the 18th at Bithumb. At the same time, on CoinMarketCap, ETH was traded at $3,888, about $750 lower than the all-time high ($4,635).

This year, ETH had events that could have a positive impact on the price, such as the approval of spot-listed exchange-traded funds (ETFs) and the U.S. presidential election, but its performance was poor compared to BTC or other altcoins. On the day of the U.S. presidential election on November 6, when Donald Trump's victory was likely, BTC rose 64% compared to the beginning of the year based on CoinMarketCap, but ETH only rose 6%. On the other hand, Solana (SOL), one of the altcoins that attracted attention in the industry this year, rose 64% compared to the beginning of the year. Researcher Kim Dong-hyeok of Disfread said, "The large-scale capital inflow into BTC spot ETFs and Trump's virtual asset-friendly remarks had an impact on the rise in BTC prices, while ETH spot ETFs recorded net outflows until last October, and the popularity of Solana-based meme coins relatively did not receive attention."

However, as interest in ETH spot ETFs has surged recently, the upward trend in ETH prices is prominent. On the 17th, the ETH spot ETF recorded a net inflow of $51.1 million (about 73.4 billion won) and has seen capital inflows for 16 consecutive trading days. On the 29th of last month, $3.329 billion was inflows into the ETH spot ETF in a single day, surpassing the daily inflow amount of the BTC spot ETF. Researcher Kim said, "The recent upward trend in ETH is thanks to the massive capital inflow into the spot ETF."



The expectation of regulatory easing on Ethereum-related issues ahead of the Trump administration's inauguration also had an impact. The president-elect Trump recently nominated Paul Atkins, a former SEC commissioner known to be virtual asset-friendly, as the next SEC chairman. In contrast, the SEC under the leadership of former chairman Gary Gensler has been at odds with the industry by treating ETH, SOL, and other altcoins as securities.

In fact, the SEC's prosecution of Consensys, the developer of the Ethereum-based virtual asset wallet Metamask, for securities law violations and the ban on trading ETH spot ETFs that include 'staking (virtual asset deposit)' have affected the competitiveness of the Ethereum ecosystem. Kim Min-seung, head of the Cobit Research Center, said, "After Trump's election, which promised to dismiss former chairman Gensler, the expectation of a change in the SEC's stance has increased interest in the Ethereum ecosystem." Researcher Kim added, "If the securities risk is resolved and staking is allowed in the ETH spot ETF, it will be a great boon."



With the optimistic outlook for ETH, a rebound in other altcoins is also expected. The center head Kim said, "The issue of ETH's securities is also related to the judgment of securities on other altcoins such as SOL," and "The resolution of ETH's securities risk will be a boon to the entire altcoin market." Researcher Kim said, "If the SEC becomes virtual asset-friendly, the possibility of more altcoin-related ETFs being launched is high," and "If such products are traded in the futures market of the Chicago Mercantile Exchange (CME), it is expected that large-scale capital inflows from institutional investors can be expected."

Choi Jae-heon, reporter

chsn12@decenter.kr