Ethereum serves as the platform for transactions conducted in the digital currency known as ether. It is widely known as the second-largest crypto asset behind bitcoin.
That’s not necessarily a bad place to be. With a burgeoning usage case for smart contracts and more, ethereum has its own bull thesis that could match or exceed that of bitcoin. Additionally, as is the case with its larger rival, it has a penchant for drawing eye-catching price forecasts.
Put it all together and there’s a budding case for ethereum in the exchange traded funds wrapper. This a concept being met by new ETFs, including the Bitwise Ethereum Strategy ETF (AETH ). The ETF is less than a month old. It invests in CME-listed ethereum futures contracts with an emphasis on front-month contracts.
AETH Could Be a Well-Timed Ethereum ETF
New ETFs, regardless of underlying asset class, can benefit from good timing. That perk may be enjoyed by AETH. That is because the fund debuted when an increasing number of cryptomarket participants are forecasting sizable gains for ether.
Some ether bulls believe the digital currency will rise to $10,000, a more than fivefold increase from current levels. That outlook is supported by both attractive fundamentals and bullish technicals.
“For almost its entire history of price action, ETHUSD has been filling out what appears to be a massive rising wedge pattern. Such patterns are predominantly bearish, breaking down roughly 60% of the time,” reported Tony Severino for NewsBTC. “That leaves 40% of the time that these patterns break upward. Descriptions of the pattern reveal that wedges are notoriously prone to false breakouts and/or false breakdowns, where price violates one trend line, only to reverse and target the other.”
How long it takes for ether to make good on the promise of its bullish technical setup remains to be seen. But $10,000 is likely a long way off. Some crypto experts believe that if ethereum can conquer $2,100, a significant near-term rally could be in the offing. Fortunately, there is a fundamental case to support ether’s technical objectives and it could make AETH more appealing.
“Ethereum is unlike many other crypto assets in that its value is driven directly by the use of the Ethereum blockchain. Every time people use an application built on Ethereum, they have to pay a fee using the Ethereum asset. This fee is returned to Ethereum investors in a manner similar to stock buybacks and dividends, providing an important starting point for valuations,” according to Bitwise.
For more news, information, and analysis, visit the Crypto Channel.
