Ethereum Price Prediction: Analyst Forecasts $6,000 by September
A well-known cryptocurrency analyst, degentrading, has put forward a confident prediction that Ethereum will surge to $6,000 by September 2024. This forecast comes as a response to Andrew Kang, the founder of Mechanism Capital, who believes that Ethereum may not perform as well as expected, despite the upcoming launch of US spot Ethereum ETFs.
Kang’s analysis indicates a continued downward trend for ETHBTC, with the ratio projected to fluctuate between 0.035 and 0.06 in the coming year. In a detailed discussion on X, Kang expressed doubts about Ethereum’s potential, especially with the ETF launch just around the corner.
Counter-Argument for Ethereum’s Rise
In contrast, degentrading presented a counter-argument in a discussion on X. He began by examining the change in CME open interest (OI) from before the ETF days to the present, noting a significant increase of around $5 billion. According to degentrading, the ETF’s introduction could simplify trading constraints, potentially unlocking a substantial influx of capital.
However, he also highlighted the challenges posed by the disappearance of prime brokers like Genesis, which complicates spot borrowing as a hedge against CME futures longs. Despite this, degentrading estimated that there could be around $7 billion in potential inflows, depending on certain assumptions.
Ethereum vs. Bitcoin
Degentrading compared Ethereum to Bitcoin, arguing that Ethereum has a higher ceiling due to its positioning as a decentralized global settlement layer. He noted that traditional finance professionals are more enthusiastic about Ethereum and other assets like SOL compared to Bitcoin.
One crucial point in degentrading’s analysis is Ethereum’s relative illiquidity compared to Bitcoin. He emphasized that even though Ethereum is smaller in size, its liquidity is only about 10% of Bitcoin’s, which means that smaller capital inflows could significantly impact Ethereum’s price.
Market Outlook and Potential ETF Impact
Degentrading also addressed the current sentiment on Crypto Twitter (CT), highlighting it as a positive technical setup for Ethereum. He mentioned the expectations for significant inflows with the ETH ETF launch, which could further boost Ethereum’s price.
Additionally, he discussed the potential impact of Grayscale’s Ethereum Trust (ETHE) converting into an ETF, suggesting that ETHE might face less selling pressure compared to the Grayscale Bitcoin Trust (GBTC) due to a smaller lender overhang.
Analyzing Cash and Carry Trades
Andrew Kang responded to degentrading’s analysis by pointing out the involvement of large funds like Millennium in basis trades. Despite this, degentrading argued that the cost implications of holding cash and carry positions could impact market makers’ profitability.
As of the latest update, Ethereum is trading at $3,362.90, with degentrading’s prediction of $6,000 by September 2024 sparking interest and debate among cryptocurrency enthusiasts and analysts alike. It remains to be seen how Ethereum will perform in the coming months leading up to the predicted price target.