Ether's Revival: A New Lease on Life for the Second-Largest Cryptocurrency

For some time now, it has been trendy to criticize ETH. While US-based spot bitcoin ETFs successfully propelled bitcoin into the mainstream, reaching $118,000 within a year and a half of their launch, the same effect was not observed for ether, which currently trades at $3,400 - the same price as in February 2024, prior to the issuance of its own spot ETFs. Multiple issues have contributed to this, including the higher cost and complexity of using Ethereum compared to other layer 1s like Solana, as well as the division of the network's on-chain value between ETH and layer 2 tokens such as ARB and OP. Furthermore, Ethereum's intricacy makes it challenging to create a catchy slogan that could aid financial advisors in grasping the value of its native token. If bitcoin is often referred to as digital gold, then what is ether - digital oil or perhaps the currency that powers a global computer? Unfortunately, none of these descriptions seem to have the same impact. The Ethereum ecosystem has acknowledged these problems and is working to address them, although the impact on price has been minimal so far. However, the emergence of ETH treasury companies, such as SharpLink and BitMine, which employ strategies similar to those of Michael Saylor but with a different asset, appears to have triggered a significant rally. Whether this momentum can be sustained remains to be seen, but as of now, ETH has seen a 5.5% increase in the last 24 hours, a 23% rise in the last week, and a substantial 135% growth since its low in April. The ETH/BTC ratio, which had been declining steadily since The Merge in September 2022, has made a higher low and returned to February levels. Meanwhile, ether ETFs have just experienced their best day yet, attracting $726 million in net inflows on Wednesday. According to Steve Berryman, chief business officer at Bitwise Onchain Solutions, 'the ecosystem's narrative has greatly improved, with more clarity on the roadmap, benefits, and institutional adoption, all of which are starting to build momentum together.' Additionally, the stablecoin bill, which could be ratified by Congress at any moment, is likely to have a more significant impact on Ethereum than other networks, given that over half of the stablecoin supply remains within its ecosystem, as stated by Tim Lowe, a strategic advisor at the firm. In other words, Ethereum may emerge as the primary beneficiary of the increasing regulatory clarity in the crypto space following Donald Trump's re-election. This development could also help solve Ethereum's marketing problem, as argued by Berryman, by allowing the platform to focus on being recognized for its role in stablecoins and real-world assets rather than trying to define its complex nature with a single soundbite. The theory is that there is a direct relationship between the value held on the network and the price of ether, as the value of the token is what secures the network. As Lowe explained, 'if the network is holding trillions of dollars, it cannot be secured with just a million dollars; fundamentally, it has to be proportional to the amount that is secured.' Consequently, as the value held on the network increases, the token price is expected to rise as well.