A crypto analyst suggests that while Ethereum gained attention from Wall Street due to spot ETFs, it’s now competing with tech stocks that are showing better returns.
Ethereum’s competition with tech stocks, it’s a problem?
Nick Forster, the founder of the crypto derivatives platform Derive and a former Wall Street trader shared that Ethereum is facing challenges because it lacks a compelling story to boost its price compared to other assets.
The launch of spot Ethereum ETFs in July has brought more attention to the asset, but it has also put it in direct competition with more profitable technology stocks that are generating better revenue.
Ethereum increased by only 0.98% since January 1, trading at $2,376 on the time of writing.
In contrast, leading tech stocks like Nvidia, or Meta Platforms saw much larger gains, with Nvidia up 122.57% and Meta up 49.26% over the same period.
Forster thinks that while it’s possible for Ethereum to break its ATH by the end of year, it isn’t very likely.
He mentioned that options markets give it about a 10% chance of reaching that level, and three key events need to align for this to happen.
These events include Donald Trump winning the U.S. presidential election in November, the Federal Reserve making bigger-ish rate cuts to increase liquidity, and also need a general rise in global financial liquidity.
Impact of the U.S. election, it moves markets?
Forster argues that the coming U.S. election could be a major event for Ethereum, and all crypto, even more impactful than the approval of spot ETFs.
There is expected to be increased volatility around the election, with potential price movements of 10% to 15% on that day.
Traders are anticipating larger price swings than what Ethereum experienced lately.
Typically, Ethereum has seen daily price changes of about 2.5% to 3%, but the market is now pricing in daily moves closer to 3.5%.
Fed’s rate decision moves markets, but what will happen?
Meanwhile, some traders caution that a rate cut from the Federal Reserve may not be enough to boost Ethereum’s price if it falls short of market expectations.
An analyst warned that if the Fed only cuts rates by 25 basis points instead of the rumored 50, it even could lead to negative market reactions, due to the disappointment.
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