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As we quickly move into a new era with the current US Administration on Crypto policy, we see an ever shifting landscape. US Gov policy favours the ALT coin Ethereum (ETH). As a plethora of new bills are set to create a federal framework for regulating the Cryptocurrency sector as a whole. Known as the “Genius act”, which lays out the framework and new regulations for Stablecoins, which in all essence is a digital currency pegged to the value of the USD. Stablecoins such as USDT and USDC are both built on the ERC-20 smart contracts. Simply meaning that every transaction is burning ETH. In turn, if we did see widespread adoption of SC’s we would expect consequential supply shocks in ETH. 

Much growth lies ahead for ETH. As the ETH ecosystem gains from the new Gov policy shift of the last four years. Legislation within the Cryptosphere is bringing revitalized optimism to Ethereum which continues to prove it’s functionality as a widespread payment system. Processing refunds, payments and settlements. A multitude of cross border transactions becoming ever cheaper, which only aids in mass adoption. 

With at least three planned network upgrades over the coming few years which will speed up the Layer 1 blockchain allowing it to compete effectively with it’s rivals.

Institutional investors are already accumulating Ethereum and this will grow as the framework for regulation is rolled out. The SEC could approve ETH ETF’s which would offer staking features. Approx 3-4% annual yields. Bringing further Institutional interest into ETH causing prices to potentially soar. 

How could lower interest rates impact ETH?

History shows us that lower rates can to lead to higher Crypto prices. Mostly due to lower borrowing costs, which make riskier assets more appealing leading to larger inflows of capital and therefore a rise in prices. 

Speculators vary vastly in where they envisage ETH prices going. From 5K to 22K by 2030. Cathie Woods of ARK Invest believes 166K is possible by 2032. For now this remains highly speculative. But, Ethereum has a bright future ahead, and already proven a resilient investment over time for those of us who invested early.

Price action, bulls remain some distance off ATH of 2021 at 4768.35. Recent highs in December 2024 of 4118.32 and just this week a run on 3830.11. From here to continue upside momentum the bulls would need to test and take out that prior high of Dec 2024 to build a new SUPP base and leg up in to mid 4000’s. 

Bitcoin (BTC) Just off recent highs of 123,000 largely rallied off the same regulatory news from the current US administration. An asset class that has already seen tremendous institutional adoption with more to come. Many speculators predict 200K-250K price point with in the coming year or so. Whilst this seems a lofty valuation from the outside looking in, we must remember that such a valuation in BTC would only equate to 25% of the Gold market valuation. When using this model of valuation we can easily visualize a longer term price point somewhere in the region of $1M a Bitcoin.

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