What’s up with Ethereum?

Ethereum (ETH) has been on a long losing streak against bitcoin (BTC) since 2022. That appears to be changing.

Look at the chart below. It shows BTC versus ETH over five years. Currently 1 BTC = 26 ETH. That figure was as high as 57 back in 2019, but then ETH took off with its promise of a new financial system built on the blockchain and embossed with smart self-executing contracts.

Suddenly, you could borrow money without so much as an email for identification, using BTC as collateral. Should the value of your BTC collateral drop below a certain threshold, the contract would automatically liquidate and your loan would be repaid to the originator.

That was just the start of it. Insurance contracts are now offered, using self-executing smart contracts to effect payouts. If you’re insured against hail damage on your farm, the smart contract will verify the weather for your area and pay you out. There are now thousands of such options built on the blockchain.

Bitcoin v Ethereum

The ETH price is up nearly 40% over the last month, surging past $3,600 and coming within 26% of its all-time high.

Stablecoin inflows into exchanges have hit record highs, providing liquidity and supporting Ethereum’s upward trend, according to CoinMarketCap.

There’s also growing demand for leveraged ETFs, spurred by Donald Trump’s recent victory in the US election. Some analysts are predicting a short-term target of $4k and as high as $15k at the completion of the next bull market.

ETH in USD

Another noteworthy trend is the rise in open interest positions in ETH futures, which is a signal of optimism.

In futures trading, "open interest" refers to the total number of outstanding contracts that haven't been settled or closed out. The higher the open interest, the greater support for the trend already in play.

The next target for ETH is $4k, which appears tantalisingly close now that BTC is taking a breather after its run-up to a whisker within $100k.