Donald Trump’s recent victory in the U.S. presidential election has ignited renewed optimism within the cryptocurrency community, particularly regarding Ethereum (ETH) and Bitcoin (BTC). Analysts are speculating that Bitcoin may surpass the $100,000 mark before the end of 2024, a sentiment that could significantly impact Ether’s trajectory, potentially driving its value above $3,200 in the near future.
Market Response to Trump’s Win
The immediate aftermath of Trump’s election victory was reflected in market movements. On November 6, following his announcement as the winner and securing a second term, investor interest in cryptocurrencies surged. This increase in confidence translated into substantial inflows into Ether exchange-traded funds (ETFs). According to Farside Investors, ETH ETFs saw impressive net inflows of $52.3 million on November 6, climbing to $79.7 million the following day. These inflows, alongside heightened investor appetite post-election, are pivotal factors behind analysts’ bullish outlook on Ether’s price.
Bitfinex analysts highlighted their expectations, stating, “We anticipate Ether will soon break out of its long-term consolidation range, where significant accumulation has occurred. Our near-term target for Ether is $3,200.” They noted that much of this forecast is contingent upon Bitcoin’s dominance in the cryptocurrency market. When Bitcoin’s market cap approaches 60%, analysts believe Ethereum is poised for a substantial price increase. As of 8:10 AM UTC on November 8, Bitcoin’s market dominance was at 60.4%, indicating a potential breakout for Ether.
Broader Optimism in the Crypto Market
Many analysts are optimistic about the overall cryptocurrency market following Trump’s election and his anticipated policy direction. Ryan Lee, chief analyst at Bitget Research, indicated that Bitcoin’s path to exceeding $100,000 is becoming increasingly likely as 2024 approaches. Given the historical correlation between Bitcoin’s performance and Ethereum’s price movements, this bullish sentiment for BTC is expected to propel ETH’s rise as well.
Open Interest and Price Surge Potential
Supporting the expectation of Ether’s price increase are its rising open interest levels, which analysts describe as “abnormal.” Open interest refers to the total number of outstanding derivative contracts—futures and options—linked to Ether. Recently, Ether’s open interest surged to $1.3 million, a significant jump from August’s $800,000. Bitfinex analysts, utilizing Cumulative Volume Delta (CVD) and bid/ask skew data, argue that this increase largely stems from short positions, leading them to predict significant gains for Ether in the coming month.
Moreover, Ether’s growing spot market activity adds further positivity to investor sentiment. Following the election, Ether’s price volatility increased as many expect a substantial surge driven by high market participation and speculative trading.
Bitcoin’s Milestone and Ethereum’s Rally Potential
In addition to these factors, Bitcoin’s recent surge to an all-time high of over $76,400 on November 6 reinforces the possibility of a new bullish phase in the cryptocurrency market. Historically, Ether tends to follow Bitcoin’s price movements, suggesting that a significant rally for Ether could be on the horizon.
Potential for Pro-Crypto Policies
Looking beyond immediate market reactions, many experts anticipate that Trump’s return to the White House may lead to favorable pro-crypto policies that could invigorate the blockchain industry. Observers speculate that the new administration could expedite the approval of innovative financial products, including the highly anticipated staked Ether ETF. Analyst Edward Wilson from Nansen remarked, “The regulatory environment is likely to shift in favor of crypto initiatives, and we may see early approval of a staked ETH ETF.” He believes such a product would unlock Ether’s full potential as an asset, making it a cryptocurrency to watch closely.
The enthusiasm surrounding ETFs supports Wilson’s viewpoint. Should more Ether-backed ETFs enter the market, these products could propel Ether’s price to new heights, possibly surpassing its previous all-time high of $4,800 set in November 2021. A staked ETH ETF would particularly attract institutional investors, further increasing demand for Ether.
Historical precedents from Bitcoin ETFs enhance these expectations. When spot Bitcoin ETFs began trading in the U.S. in early 2024, they significantly contributed to Bitcoin’s price climbing above $50,000 within a month, accounting for roughly 75% of new investments in Bitcoin during that period.
If Ethereum follows a similar trajectory, the approval of staked Ether ETFs could have a profound impact on its market dynamics. Ether-based ETFs could emerge as a crucial player in the next phase of cryptocurrency growth.
A Promising Future for Ethereum
In summary, the combination of Trump’s election victory, a rising appetite for cryptocurrency investments, and the potential for innovative financial products suggest a bright future for Ethereum. As Bitcoin gears up for its next milestone, analysts predict that Ethereum could follow suit, especially with eyes set on the significant $3,200 mark. With these dynamics in play, the cryptocurrency community remains hopeful for a substantial price surge in Ethereum in the coming months.
