Bitcoin hit an all-time high on Wednesday, just one day after the first BTC-linked exchange-traded fund (ETF) began trading on the New York Stock Exchange. The ProShares Bitcoin Strategy ETF (BITO) saw more than $550 million flow into the new futures-linked product on its first trading day. Now, an analyst at Fundstrat Global Advisors says the enthusiasm will push the second-largest cryptocurrency with market cap Ethereum to far surpass its own previous record…
Sean Farrell: Bitcoin (BTC) profits could head towards ETH
Sean Farrell, Head of Digital Asset Strategy at Fundstrat, said he expects Ethereum (ETH) not only to surpass the ATH level set in May of around $4,200, but potentially to $10,000. As the new research note highlights, large-scale moves in Bitcoin tend to precede the following peaks in Ethereum.
Farrell says:
What we’ve seen in previous bull market cycles for Bitcoin is Bitcoin leading the rally in general, capital returning, investors taking their earnings and converting to altcoins, the most dominant heavily traded altcoin Ethereum. Frankly, we think a lot of people are overlooking Ethereum by the end of the year, as Bitcoin takes the lion’s share of the headlines.
$10,000 price call for ETH from Magnetic General Manager Megan Kaspar
Both Kaspar and Farrell point to the same fundamental catalyst for bullish price targets – Ethereum has planned deflationary changes to appear on its network.
Farrell said of the reasons for his anticipation:
You do not meet the average investor who is aware of the latest software updates on the Ethereum network. They recently updated the network with what is called EIP 1559, where transaction fees are actually burned, causing a disinflationary effect. And what we’ve seen in the recent NFT spree is what’s happening with their NFT as a whole. What is minted and traded on the Ethereum network has actually led to a rapid increase in Ethereum’s supply burn.
Kaspar has since reiterated its $10,000 price target for the same reason. He predicts that the next remaining network change will have roughly the same impact as three Bitcoin “halvings” when it potentially takes effect around the first quarter of 2022. “Halving” is defined as the Bitcoin block reward paid to miners being roughly halved every four years as the Bitcoin code dictates. It also historically started a bull cycle for BTC price action, as it most recently did in the spring of 2020.
Ethereum price analysis
As Farrell’s latest research note highlights, Ethereum rising above $4000 may encounter these levels:
It should not face much resistance at $4,410, but it should likely surpass it and rally to targets near $4,951 with additional technical forecasts up to $5,826.
Farrell and his team at Fundstrat maintain their year-end forecast of $100,000 BTC
It remains unclear whether Bitcoin’s latest rally will continue to fuel ETH’s momentum. After the ProShares Bitcoin futures ETF began trading on Tuesday, Ethereum rose 9% to $4,100 on Wednesday.
Farrell and his team at Fundstrat also maintained their previous $100,000 year-end Bitcoin price target. And he predicted a potential move up to $168,000 if the historic inflows into the new Bitcoin ETF continue.
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