The price of the second-largest cryptocurrency Ethereum ($ETH), saw a surprising surge shortly after the historic approval of spot Bitcoin exchange-traded funds (ETFs) in the United States as investors are weighing the potential of a spot Ether ETF being approved.
The price of Ethereum jumped more than 10% shortly after 11 spot Bitcoin ETFs were approved by the U.S. Securities and Exchange Commission (SEC) on January 10, to now trade at around $2,600 after enduring a slight correction from a high near $2,700 per ETH.
Several companies have already filed to list a spot ether ETF in the United States. Ark 21 Shares and VanEck, both of which now have their own spot Bitcoin ETFs trading on exchanges, filed with the SEC back in September to list these funds while BlackRock, which recently listed its iShares Bitcoin Trust, filed to list an iShares Ethereum Trust in November.
Proponents of spot cryptocurrency ETFs believe these funds could draw in institutional and retail investors, as they allow them to gain exposure to the underlying asset without actually having to go to a centralized exchange or to manage the private keys of a cryptocurrency wallet.
Ethereum’s price rise suggests that investors believe the cryptocurrency could soon see spot ETFs launched to allow investors to gain exposure to it. The rise also comes at a time in which its co-founder, Vitalik Buterin, defended increasing the network’s gas limit.
The Ethereum gas limit refers to the highest amount of gas that can be used to run transactions or smart contracts in each block. Gas is the fee paid for performing a transaction or executing a contract on the blockchain, with the gas limit ensuring blocks aren’t too large and don’t impact the network’s performance.
Buterin emphasized in a Reddit ask-me-anything session that the gas limit, which controls the network’s throughput, has been stable for almost three years – a record for Ethereum.
He estimated that raising the gas limit to about 40 million from 30 million would be “sensible”. The gas limit started at around 3 million in 2015 and has increased gradually.
Featured image via Unsplash.
