The world’s second-largest cryptocurrency, Ethereum (ETH), is experiencing a challenging week, following the US SEC’s charges against cryptocurrency exchanges Binance and Coinbase for securities violations. As of now, Ethereum is trading at $1,844.24, with a 0.84% decline over the past 24 hours and more than 1.2% decrease in the past week.
Bloomberg Intelligence’s Senior Macro Strategist, Mike McGlone, shared his thoughts on Ethereum’s future prospects, taking both the positives and negatives into account. He highlighted the key protocol metrics that can propel the cryptocurrency, as well as the potential obstacles in its growth.
On the plus side, McGlone pointed out Ethereum’s diminishing supply as a favorable factor for the protocol. However, this advantage is hampered by low demand and adoption. Ideally, a diminishing supply paired with high demand would lead to an increase in the value of Ether, Ethereum’s native token.
Conversely, McGlone highlighted the negative impact of an unfavorable Fed and technical backdrop at the start of June, which could potentially put a cap on Ethereum’s price growth.
Interestingly, this week’s conversations about digital assets have not focused on Ethereum’s securities status. Instead, the SEC has targeted alternative coins such as Cardano (ADA), Solana (SOL), Filecoin (FIL), and Decentraland (MANA), among others.
While Ethereum is not currently in the regulator’s crosshairs, SEC Chairman Gary Gensler has previously commented on the protocol’s status after its Merge event. This event turned Ethereum into a Proof-of-Stake (PoS) blockchain, putting its securities status into question. As such, Ethereum’s long-term growth outlook may be uncertain as it shares the potential risks faced by other digital currencies scrutinized by the authorities.
Despite the current bearish sentiment, Ethereum has managed to hold on to its position as the second-largest cryptocurrency after Bitcoin. It seems likely that it will continue to maintain this ranking for the foreseeable future.
However, it is essential for investors to conduct thorough research before entering the cryptocurrency market, especially in light of recent regulatory actions. As always, the author and the publication do not hold any responsibility for personal financial loss.
Source: Coingape
