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3 signs Ethereum price is on track toward $2.5K by September

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3 signs Ethereum price is on track toward $2.5K by September

Ethereum’s native asset, Ether (ETH), has more than doubled in value since bottoming out at around $885 in June 2022. Now, it eyes a decisive move toward $2,500 in August per a slew of technical and fundamental indicators.

Ethereum chain split means more tokens

A big part of Ether’s ongoing rally has appeared due to the Merge, a network upgrade that will switch Ethereum’s underlying blockchain protocol from proof-of-work (PoW) to proof-of-stake (PoS) in September.

Simultaneously, switching to PoS will also eliminate the role of miners in the chain by replacing them with validators. This fear has prompted Chandler Guo, a Chinese crypto miner, to resist the Merge by keeping Ethereum’s PoW version alive.

A chain split is possible as a result. Guo has already branded his version of the Ethereum PoW chain as ETHPoW, alongside its native token ETHW. Furthermore, some crypto exchanges have already listed the token for trading, with even Binance considering doing the same, if necessary. 

The Ethereum Merge is approaching.

Here’s what you need to know if you hold $ETH on #Binance:

Binance will support “The Merge”.
In case of newly forked tokens, we will evaluate and consider support for distribution and withdrawal.

View details ⤵️https://t.co/iuQSsXZ7fk

— Binance (@binance) August 10, 2022

A key takeaway from a potential chain split is existing Ether holders will receive an equal amount of tokens from the new chains.

In turn, that could boost ETH’s demand in the market, leading its price toward the $2,500 mark in the run-up to the Merge. 

Bullish flipping underway

During its recent price recovery, Ether has confidently rallied toward a critical support-turned-resistance range of $1,625-$1,975.

ETH/USD now aims to retake the range as support, thus giving itself a strong price floor to pursue a rally toward and above $2,000. Its nearest upside target is the 50-week exponential moving average (50-week EMA; the red wave in the chart below) at $2,340.

ETH/USD weekly price chart. Source: TradingView

The next range breakout target could be at the Ether multi-month descending trendline resistance (the black line) at around $2,500.

Institutional inflows gain momentum

The technical upside target of $2,500 receives cues from a recent uptick in capital inflows into Ethereum-based investment funds.

Related: Optimism TVL surges nearly 300% M/M ahead of The Merge upgrade

Notably, these institutional products attracted $16.3 million from investors in the week ending Aug. 5. Similar funds for Bitcoin witnessed capital outflows worth $8.5 million in the same period, suggesting a strong upside bias for Ether versus the top crypto.

Net capital flows in/out of crypto funds. Source: CoinShares

Overall, the buzz around the Merge acts as the main bullish catalyst, as mentioned above. However, Ether could see strong price corrections after the upgrade to PoS occurs in September when traders potentially start to “sell the news.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Bit Coin

Grayscale Launches New Investment Product While Bitcoin Trust Crashes to 35%

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Grayscale Launches New Investment Product While Bitcoin Trust Crashes to 35%

Grayscale Investments is offering investors an opportunity to invest in Bitcoin mining hardware in the bear market.

The new investment opportunity, called the Grayscale Digital Infrastructure Opportunities LLC (GDIO), is now open to qualified individual and institutional investors, even as the asset manager allows ETF-related court proceedings to run their course.

Grayscale putting capital to work

Grayscale will use investor capital from the GDIO to buy mining hardware for a minimum of three years. It will use the hardware to mine and subsequently sell bitcoin. Mining is the energy-intensive process undertaken by a computer network to create a new transaction block and verify it. The node in the network that creates the block is known as a miner. A miner is rewarded in bitcoin for his effort, which typically requires large amounts of cheap electricity and computing power.

Part of the proceeds Grayscale will earn from its efforts will be paid out quarterly to GDIO investors.

“Grayscale’s unique position at the center of the crypto ecosystem enables us to create offerings that allow investors to put capital to work through differing market cycles,” stated Michael Sonnenshein, Grayscale’s chief executive.

GDIO represents another way the company has sought to provide investors with exposure to bitcoin without directly holding the asset.

Investors can also purchase shares from its GBTC trust and gain exposure to bitcoin through Grayscale’s legally regulated business in the U.S.

But Grayscale has a problem. Because investors cannot redeem shares in the trust for bitcoin, the price per share has dropped drastically, trading at a discount of 35% to its Net Asset Value. 

At the close of the trading day on Oct. 5, shares were trading at a shade over $12, despite being backed by $18.45 worth of bitcoin.

To mitigate this discount, Grayscale has pursued the conversion of GBTC into a spot bitcoin exchange-traded fund, which has so far been unsuccessful. The U.S. Securities and Exchange Commission denied the company’s latest application in June 2022, prompting Grayscale to pursue legal action against the federal agency. 

Nic Carter of Castle Island Ventures, a venture capital firm focused on early-stage public blockchain startups, said that Grayscale could wind down the ETF:

watching the GBTC discount. looks like ATL at -35%. on top of discounted spot BTC. paths to breaking open the piggy bank: SEC can approve ETF conversion, or Grayscale can wind down the trust themselves if they so choose.

— nic carter (@nic__carter) June 17, 2022

The SEC maintains that spot bitcoin ETFs are prone to underlying market manipulation.

Grayscale undeterred by SEC rejection

Despite consistent resistance from U.S. regulators, Grayscale launched its first European ETF in May 2022, which tracks the Bloomberg Grayscale Future of Finance Index, offering customers exposure to institutions at the crossroads of finance, technology, and cryptocurrencies.

Grayscale raised investors’ eyebrows recently when it announced that it had applied with the SEC to distribute 3 million ETHPoW tokens that were distributed to all Ethereum (ETH) holders after the controversial proof-of-work fork went live. 

At the time, Grayscale said it was seeking the rights to sell the tokens and pay out shareholders. 

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Colorado is accepting crypto for tax payments — it could be a mess or a shining example

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Colorado is accepting crypto for tax payments —  it could be a mess or a shining example

Colorado is now accepting crypto for tax payments — but if you choose to use that option, it could change the amount you owe…
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BNB Chain confirms BSC halt due to ‘potential exploit’

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BNB Chain confirms BSC halt due to ‘potential exploit’

Rumors of a significant hack on the BNB Chain were confirmed by the blockchain’s team, with all deposits and withdrawals suspended on the network…
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