Crypto polls reveal that 47% of investors expect leading altcoin Ethereum to ‘overtake’ Bitcoin. Fidelity Digital Assets has a bullish forecast for ETH in the next 12 months. A separate survey by CryptoVantage reveals that 47% of investors expect Ether to “overtake” Bitcoin. Crypto expert Marcel Pechman covers the issue in detail.
of Fidelity What is the bullish thesis on the leading altcoin based on?
Fidelity Digital Assets released a “Q2 2023 Signals Report” on July 18 claiming that the outlook for Ether over the next 12 months and long term is positive. cryptocoin.com As you follow, Ether has gained 62% year-to-date. However, while the investment firm is showing a short-term bullish trend in Ether, that doesn’t mean it believes the month-long bullish channel will continue. Institutional investors like Fidelity Digital Assets have a longer-term bullish vision for the price of ETH. However, it is necessary to compare their analysis with network and market data to see if they are above the altcoin.
Ether 1-day price index. Source TradingViewBeyond technical indicators, the rationale behind Fidelity’s bullish outlook for Ether is the network’s higher burn rate against coin issuance, “new address momentum”, and an increase in the number of network validators.
Fidelity “Q2 2023 Signals Report,” July 18. Source: Fidelity Digital AssetsAccording to the Fidelity report, the net issuance since Merge in September 2022 has resulted in a net supply drop of more than 700,000 Ether. Analysts also claim that Glassnode data, which shows an increasing number of first-time Ethereum addresses transacting, proves healthy adoption of the network. The report also marks a 15% increase in the number of active Ethereum validators in the second quarter.
“Temporary storage opcode” improved smart contract efficiency. In addition, it has reduced costs. In addition, Ethereum has strengthened the Virtual Machine design. Therefore, the prospect of EIP-1153 is also gaining momentum for the Ethereum network. According to DefiLlama data, this change is especially meaningful for decentralized exchanges (DEXs), where Ethereum’s dominance has dropped to 46% from 60% six months ago.
Will the Dencun upgrade reduce transaction costs?
Another potential bullish factor for the Ethereum network is the anticipated upgrade on the leading DEX Uniswap. According to a presentation at the Ethereum Community Conference on July 17, the upcoming Uniswap v4 will allow users to create pools of unlimited types using programmable buttons (hooks), native ETH support, and a single contract that executes internal transactions before closing final balances. The announcement raises the possibility that EIP-1153 will be included in the next “Decun” upgrade. That triggered Slingshot and DeFi Pulse co-founder Scott Lewis.
i had missed the news that uniswap labs got eip1153 into cancun.
they kept the details for wanting eip1153 secret from the community, only publishing v4 only after inclusion was finalized.
informal governance captured by an insider-aligned, for-profit monopoly. sad day.
— scottlewis.canto➕ (@scott_lew_is) June 13, 2023
If approved, the app will be vital for the Ethereum network to make up for lost market share due to high gas fees. Because the average seven-day transaction cost has been above $4 since February. As a result, the total locked value of Ethereum is 13.55 million ETH, according to DefiLlama. This is the lowest level since April 2020.
What’s more, decentralized app activity has dwindled, as evidenced by DappRadar’s 30-day data of uniquely active wallets. Uniswap, -28%; 1inch Network, -14%; MetaMask Swap, -8%; and OpenSea, -5%. For comparison, over the same period, BNB Chain’s PancakeSwap was up 10%. In addition, Polygon’s Uniswap users increased by 8%.
Derivative metrics for leading altcoin remain steady
Ether quarterly futures point to unease among professional traders. These fixed monthly contracts typically trade at a 5% to 10% premium over the spot markets. This aims to compensate for delayed reconciliation, a condition known as contango.
Ether 3-month futures premium. / Source: LaevitasAccording to data from Laevitas, the Ether quarterly futures premium is currently below the neutral threshold. It is also at 4%, which is lower than the 5.5% seen on 14 July. This indicator is clear evidence that traders are less inclined to use leverage for bullish ETH positions.
Ether has gained 59% year-to-date. More worryingly, this may have caused investors to be overly optimistic. A new survey by CryptoVantage of 1,000 North Americans who have invested in cryptocurrencies over the past five years reveals that 46% named Ether the top contender to surpass Bitcoin.
Cryptocurrencies with the highest chance of surpassing Bitcoin. / Source: 2023 CryptoVantage surveyThis is a somewhat surprising perspective. However, it is possible that it is misleading, as the survey did not ask whether any crypto would eventually convert to Bitcoin. For this reason, respondents do not necessarily put strong odds on this outcome. Fidelity’s analysis gives valid reasons why the firm has soared in Ether’s 12-month price performance. However, in the shorter term, indicators point to an increased probability of altcoin price falling below the channel support. These indicators include recurring high gas fees and the indifference of leverage buyers.
