On January 23, CoinDesk reported that despite a strong start to the year, Ethereum and the entire crypto market experienced a pullback this week. However, Geoff Kendrick, Head of Digital Asset Research at Standard Chartered Bank, still believes there are reasons to remain bullish. In early US trading on Friday, ETH was trading at approximately $2,912, down about 12% for the week and down about 1.7% year-to-date. BitMine (BMNR), owned by Tom Lee, currently the largest enterprise-grade Ethereum holder, saw its share price fall nearly 9% this week, with its year-to-date decline widening to approximately 10%.
Kendrick points out that Ethereum network activity has surged in recent weeks, with transaction volume reaching an all-time high, primarily due to the capacity boost from the Fusaka upgrade in December. He states that this surge in usage signifies a departure from previous cycles, where upgrades failed to drive long-term network growth. Unlike previous upgrades, Fusaka appears to be alleviating previous bottlenecks, enabling more users and developers to complete transactions smoothly. This capacity increase distinguishes the current wave of growth from previous waves.
Kendrick points out that BitMine has shown no signs of slowing down its Ethereum purchases, and Tom Lee outlined plans for further acquisitions at last week's annual shareholder meeting. The macroeconomic environment has also played a positive role. The elimination of Greenland-related tariff risks, the rebound in the Japanese bond market after the panic selling earlier this week, and the rising likelihood of Rick Rieder, BlackRock's head of fixed income, becoming the next Federal Reserve chairman are all favorable for risk assets. This should benefit cryptocurrencies, and long on ETH and BMNR over the weekend seems to offer a good risk/reward ratio.
