Ether, the native cryptocurrency of the Ethereum network, has reached the US$3,000 mark for the first time since April 2022, in what investors and market watchers are calling the arrival of “altcoin season.”
Altcoin season refers to a period when cryptocurrencies experience significant increases in value compared to Bitcoin. This is often characterized by a surge in market interest, investment, and price appreciation of altcoins.
During an altcoin season, investors and traders may shift their focus from Bitcoin to altcoins in search of higher returns, driven by speculation, new project developments, or broader market trends.
Ether outperformed Bitcoin and other major cryptocurrencies on Tuesday and briefly traded above US$3,000 before tracing back. It traded at US$2,918 at 1:30 p.m. ET, according to CoinMarketCap data.
Ether is up by 10.8% for the week.
The increase has been attributed to the anticipation of a potential approval for a spot-based Ether exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC), which could attract more traditional and institutional investors.
The approval of a spot Ether ETF is expected to mirror the success of new Bitcoin ETFs that debuted last month, which have already attracted significant allocations.
In addition to ETF speculation, Ethereum’s upcoming network upgrade, known as the Dencun upgrade, is also contributing to the positive sentiment.
The upgrade, scheduled for March 13, aims to implement Ethereum Improvement Proposal (EIP) 4844, introducing proto-danksharding to simplify transactions and reduce costs by storing some data off the blockchain. This technical enhancement is expected to speed up transactions.
