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Ethereum Still 39% Below ATH – But 3 Reasons Why ETH Could Rally
As the cryptocurrency market continues to evolve and adapt to new developments, many investors are left wondering whether Ethereum (ETH) will ever regain its former glory. Despite the recent surge in institutional demand and a growing stablecoin supply, the token remains approximately 39.1% below its all-time high (ATH) of $4,891 recorded four years ago. However, Ted Pillows, an analyst, has highlighted three key reasons why ETH could rally, potentially bridging this significant gap.
The GENIUS Act: The Catalyst for Ethereum’s Rally
First and foremost, the impending GENIUS Act is expected to bring trillions of stablecoins into the Ethereum ecosystem, significantly boosting liquidity across the network. This influx of capital would not only increase the token’s overall market capitalization but also create a perfect storm of conditions ripe for institutional investment. As it stands, Ethereum’s Stablecoin Supply has already reached $131.88 billion, with Transfer Volume dipping to $35 billion – indicating that capital is building on-chain and waiting for deployment.
Historically, rising stablecoin reserves have preceded higher network activity, which could be a harbinger of better times ahead for ETH. Furthermore, this surge in liquidity will likely attract more traders and institutions, further fueling the fire and driving prices upwards.
Expanded Institutional Participation
In addition to the above catalyst, the GENIUS Act is poised to clear regulatory hurdles that have long stifled institutional investment. Under this proposed legislation, large U.S. banks would be empowered to engage directly with Ethereum, paving the way for increased market legitimacy, capital flows, and a surge in adoption. This clarity would likely encourage sidelined institutional investors to re-enter the market, providing an organic boost to demand.
Institutional money is already flowing into Bitcoin (BTC), with recent data revealing $2.7 billion in inflows leading the charge. Should Ethereum’s GENIUS Act close this gap and bring similar momentum to the platform, it could potentially unlock a new wave of growth for the token.
Rise of Derivatives
Lastly, and perhaps most significantly, institutional investors are already signaling their intent to participate in the Ethereum market through derivatives trading. Options Open Interest has surged 9.04% to $9.88 billion, with Options Volume skyrocketing an astonishing 96.74% to $2.26 billion. Given that the majority of options trading occurs at institutional levels, this data provides a clear indication of growing participation and accumulation by smart money players.
Should these three factors converge in favor of ETH, it is not too far-fetched to imagine the token reclaiming its ATH of $4,891. With the GENIUS Act on the horizon and institutional demand showing no signs of abating, Ethereum still has plenty of room for growth.
Source: ambcrypto.com
