These are the questions investors are asking as Ethereum (ETH) appears to be on the cusp of a significant break. At the time of publication, the price of ETH was surging through $1,950.

Ethereum Break Out Insights

  • BlackRock and Fidelity seek regulatory approval for spot Ethereum ETF.
  • Approval of ETF plus Bitcoin halvening would send prices "to the moon."
Ethereum Investing
Is Ethereum about to break out?

It is quite surprising that numerous ETF providers presented their proposals simultaneously, leading one to believe that there must have been a signal to proceed. The question arises whether it was the SEC's decision or simply a case of FOMO, where all the institutions followed the lead of influential players like BlackRock in pursuing an initial listed bitcoin ETF. Regardless of the underlying reason, the price of bitcoin soared, and the chart displays an extremely optimistic trend.

BlackRock and Fidelity pump Ethereum

Ethereum, the younger sibling of the dominant Bitcoin, is poised for a significant surge, similar to its predecessor. The recent announcement of an ETH ETF by BlackRock and Fidelity caused a notable increase in its value, reminiscent of the prosperous past. The current situation begs the question, what's next?

Despite the potential for a breakout, investors have concerns that this could be a classic bull trap, where investors get their hopes up for a rally only to be disappointed by a sudden drop in price. Without an ETF, the outlook may not be favorable. Meanwhile, the upcoming bitcoin halvening is expected to reduce the new issuance of bitcoin, coinciding with a bullish intersection of events related to the Federal Reserve's quantitative tightening.

However, the efficient market hypothesis suggests that the market is already aware of these factors and has priced them in accordingly.

So will there be a bull or bear crypto market?

Crypto markets are far from efficient due to the presence of unpredictable players, regulatory uncertainties, and malicious actors. This makes it difficult for traders to identify the next big thing that BlackRock will want to ETF. The fate of bitcoin remains crucial as other cryptocurrencies tend to follow its lead. Since bitcoin lacks an ETF and is not an efficient market, there is a significant potential for growth.

The bull case is pretty straightforward, approval of an ETF plus the Bitcoin halvening equals "to the moon." On the other hand, the bear case is equally as simple, no ETF approval for BTC or Ethereum, equals dump. Despite the outcome, regulations will eventually play a role in shaping the future of crypto markets.

The entire cryptocurrency market mirrors the patterns observed during economic booms. It bears a striking resemblance to the commodities cycle of the 1970s, where commodities experienced both significant surges and declines in shorter intervals over a span of ten years.

However, nothing quite matched the intensity of the 1973-1974 period following the initial surge. Despite traders holding on in anticipation of a return to the prosperous days, it never materialized. If this analogy holds true, the current market activity suggests that we can expect a series of regular market fluctuations, rather than a surge to over $100,000 for Bitcoin.