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Breaking News: Trump Prepares To Allow Crypto Investments In $9 Trillion Retirement Market

Ethereum Poised For A Comeback Following Interest Rate Cut: Steno Research

Ash Tiwari
Ash Tiwari
10 months ago
3 mins read
ethereum

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According to Steno Research, Ethereum’s (ETH) days of underperformance against the wider crypto market might be numbered following the US Federal Reserve’s (Fed) decision to cut interest rates.

It’s Time For Ethereum To Shine Again

Regarding price appreciation, ETH hasn’t had a particularly impressive 2024. While Bitcoin (BTC) and altcoins like Solana (SOL) and Tron (TRX) have witnessed considerable price gains, ETH is still trading at its January 2024 price levels.

Notably, the second largest digital asset by market cap has tumbled 48% against Bitcoin since the Ethereum merged on September 15, 2022.

Related Reading

Ethereum Price Reaches $2,500 Again

Ethereum Price Reaches $2,500 Again: Will The Uptrend Hold?

10 months ago

For the uninitiated, the Ethereum merge was a major milestone for the leading smart contract platform as it not only changed its consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS) but also razed down the issuance of new ETH from 4% to 1% annually.

As a result, there has been a net negative ETH supply growth with more ETH being burned through transaction fees than issued to stakers.

ETH supply
ETH supply growth has plateaued since around September 2022 | Source: Etherscan.io

Ethereum’s unimpressive performance against Bitcoin can be confirmed from the following chart, where the ETH/BTC trading pair has fallen to 0.04, eroding all its gains against the flagship cryptocurrency since April 2021. However, a recent report by Steno Research opines that it’s time for Ethereum to come back. 

ethbtc
ETH has lost all its gains against BTC since April 2021 | Source: ETHBTC on TradingView.com

According to the report, the Fed’s decision to slash interest rates might be the fuel that propels ETH’s price surge in the coming months. The report references ETH’s performance during the last altcoin season, where it more than doubled in value compared to BTC in less than two months. 

This sudden growth was powered by a sharp increase in on-chain activity stemming from rising interest in ecosystems such as decentralized finance (DeFi), non-fungible tokens (NFT), and higher issuance of stablecoins. In a post on X, Mads Eberhardt, Senior Cryptocurrency Analyst at Steno Research, said:

Lower interest rates -> More on-chain activity -> Greater Ethereum transactional revenue -> Lower ETH supply growth -> Higher ETH price. Let’s go.

Several Reasons For Ethereum’s Underperformance

Additionally, the report mentions that Ethereum exchange-traded funds (ETFs) will likely outperform Bitcoin ETFs. Discussing the major reasons why BTC has overshadowed ETH until now, Eberhardt notes:

The impact of U.S. spot ETFs for both bitcoin and ether, the persistent buying pressure from MicroStrategy (MSTR), and a notable decline in Ethereum’s transactional revenue in recent months.

Related Reading

Ethereum

Ethereum In 2021 Vs. 2024: Fractal Suggests Major Breakout In Q4

10 months ago

Despite the headwinds it has faced, investor confidence in Ethereum continues to be strong. In a recent report, crypto exchange Bitwise’s CIO called Ethereum the ‘Microsoft of blockchains’, hinting it might come back by year-end after the November US presidential elections. ETH trades at $2,543 at press time, up 4.3% in the past 24 hours.

ethereum
ETH trades at $2,543 on the daily chart | Source: ETHUSDT on TradingView.com
Featured image from Unsplash, Charts from Etherscan.io and Tradingview.com
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Ash Tiwari
Ash Tiwari

Ash Tiwari

Ash is a dedicated crypto researcher and blockchain enthusiast with a passion for diving deep into the evolving world of decentralized technologies. With a background in writing and a natural curiosity for how digital assets are shaping the future, he has immersed himself in various sectors of the cryptocurrency space, including decentralized finance (DeFi), NFTs, and liquidity mining. His journey into crypto started with a desire to fully understand the technology behind it, leading him to explore and engage with these systems firsthand.

Read more

Ash’s approach to DeFi goes beyond surface-level research as he actively participates in decentralized protocols, testing their functionality to gain a deeper understanding of how they operate. From experimenting with staking mechanisms to exploring liquidity mining strategies, he is hands-on in his exploration, which allows him to provide practical, real-world insights that go far beyond theoretical knowledge. This immersive experience has helped him develop a comprehensive grasp of smart contracts, token governance, and the broader implications of decentralized platforms on the future of finance.

In the NFT space, Ash’s interest is driven by the technology’s potential to reshape ownership and creativity in the digital age. He has explored various NFT projects, gaining insights into how these digital assets function within different ecosystems. His focus is on understanding the evolving relationship between creators and communities, as well as the innovative uses of blockchain technology to establish authenticity and provenance in the digital world. Ash’s research in this area often touches on the intersection of culture, technology, and community-driven projects.

A key area of his expertise lies in liquidity mining, where he has engaged with various decentralized platforms to understand how liquidity provision contributes to the functionality and security of DeFi ecosystems. Ash’s hands-on involvement has allowed him to analyze the risks, rewards, and broader implications of liquidity pools, giving him a well-rounded perspective on this integral part of DeFi. His understanding of risk management and protocol design allows him to provide insights into how these systems can be navigated effectively, with an emphasis on both opportunity and caution.

When it comes to communicating these complex topics, Ash’s writing is grounded in clarity and depth. He excels at breaking down intricate blockchain concepts into easily digestible information for a wide audience. Whether explaining the workings of decentralized exchanges or outlining the future potential of blockchain technology, Ash ensures that his content is accessible to both those new to the space and experienced participants looking for deeper insights.

Beyond DeFi and NFTs, Ash explores a wide array of emerging blockchain applications. His research spans areas like cross-chain technologies, decentralized governance, and blockchain’s potential to integrate with traditional finance. He is continuously learning and adapting to the latest developments, ensuring that his insights are both timely and relevant. His interest extends to how these technologies are creating new possibilities for decentralization, transparency, and trust in a variety of industries.

Ash’s commitment to engaging with the crypto space firsthand gives him a unique perspective that goes beyond what can be learned from research alone. His practical involvement allows him to stay ahead of the curve, offering readers and enthusiasts a clear and comprehensive understanding of the rapidly evolving world of blockchain. Whether delving into the technical mechanics of DeFi or exploring the cultural impact of NFTs, Ash’s approach is always rooted in curiosity, research, and a desire to make this technology accessible to all.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

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