Ethereum, Solana, Voice of Crypto
Ethereum has been through a busy week so far, with major legal and competitive developments.
Some of these include the SEC’s recent postponement of its decision on the Ethereum spot options ETFs.
Another is the competition from Solana, its own L2s and other faster and more scalable networks.
Overall, Ethereum's L3 network, XProtocol is launching a new smartphone to push Ethereum into the spotlight.
Ethereum one of the crypto giants, has been asleep lately—but not anymore—at least not in terms of price action.
This week, we have seen a new set of challenges and opportunities with the “king of defi”:
From delays in the Ethereum spot ETF decision to competition from Solana and even a new crypto smartphone set to leverage its infrastructure.
Let’s go over some of the biggest developments affecting Ethereum this year.
This week, the US Securities and Exchange Commission announced that it was postponing its decision on whether to approve a new set of ETFs.
These ETFs, unlike the regular spot ETPs from July this year, are Ethereum spot ETF “options”.
According to the agency, these approvals may now have to wait until November 2024:
Likely after the US presidential elections.
This regulatory uncertainty comes just as the SEC approved options for the Bitcoin ETFs, including BlackRock's iShares Bitcoin Trust (IBIT)—after reviewing it for eight whole months.
So far, this most recent delay has caused ripples to spread across the market, especially as the cryptocurrency in question is currently facing price stagnation.
Ethereum, despite rallying by as much as 15% from early September, is now trading between $2,600 and $2,700.
Now, because of this, the market sentiment has turned fearful.
No all-time high in 2024
On PolyMarket, 85% of bettors now believe that Ethereum will not reach a new all-time high by the end of the year.
On the other hand, Solana now appears to be hot on Ethereum’s tail.
According to a report released by VanEck this year, Solana might be able to hit the $330 price benchmark soon.
In further detail, this price would also allow the cryptocurrency to capture about 50% of EThereum's current market cap.
This, according to VanEck, is likely going to happen because the former has superior speed and cheaper transactions.
VanEck reiterated that Solana’s throughput is about 300 times higher than Ethereum's.
This means that it can process thousands of transactions per second—without mentioning how its user base is about 1,300% larger.
In addition, transaction fees on Solana are cheaper by a staggering 5 million percent compared to Ethereum.
The asset manager believes that more retail investors are waking up to Solana's potential, especially for payments.
However, on the other hand, institutional investors still seem slightly hesitant to make the switch.
While Ethereum is doing well so far, VanEck believes that its first-mover advantage is gradually fading, as others like Solana and Sui continue to attract users.
Another problem with Ethereum is also how its own Layer2 networks are now competing with it, especially after the Dencun upgrade.
This upgrade drastically reduced transaction fees on L2s, causing investors to flock towards them and tank the L1’s revenues by as much as 99%.
All of this combined is likely the major cause of its ongoing price stagnancy.
In a bid to expand Ethereum's reach, XProtocol is set to launch its first crypto-based smartphone later this year.
This phone is called XForge and has a market price of $299.
It is the first “DePIN phone” designed to connect users with decentralized physical infrastructure networks.
It also does this while offering rewards through gaming and airdrops.
In detail, XForge is built on the Base network but is under plans to migrate to its own L1 network in the future.
The phone is set to feature 256GB of storage, 12GB of RAM and a Snapdragon 8 Gen 2 processor.
In essence, it is a formidable opponent to even some of the biggest players in the crypto phone space.
This also interestingly follows Solana Mobile’s announcement of the Saga last year and its incoming Seeker model.
So far, the ongoing competition between Solana and Ethereum is bound to expand further than mere defi and NFTs.
Ethereum is currently at one of the most important parts of its journey. This includes competition from Solana and other chains.
It is also facing significant competition from its own L2s.
However, through it all, the network still holds a strong user base as the second largest crypto in the world and the largest by far in defi TVL.
As the year comes to an end, a lot will depend on the SEC’s decisions regarding the ETFs, the competition from L2s, and Whether Ethereum can stand its ground against the newer, faster competitors.
The introduction of the Xforge could also help it attract new users.
However, only time will tell what comes next.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.