The recent greenlighting of the ETH ETF has sparked a revolution in the world of altcoins, particularly among L2 and DeFi OGs who are expected to rally. However, projects that have been dubbed as “Ethereum killers” may be left behind in the post-ETH ETF era.
The approval of Ether Exchange Traded Funds (ETFs) has had an immediate impact, causing Bitcoin to surge into the $70k range and Solana to climb back up to $180. However, certain external factors, as highlighted by Crypto News Flash, have dampened market sentiments and led to the assets stabilizing just below critical resistance levels. Interestingly, analysts believe that the approval of S-1 registration statements will trigger another rally, pushing prices to new all-time highs.
As a result, altcoins are expected to dominate the market, as evidenced by the revision of Bloomberg analysts’ approval chances from 25% to 75%. When this news broke, ETH saw a 20% surge, reaching over $3,800, underscoring the significance of this development for Decentralized Finance (DeFi) compared to the approval of a Bitcoin ETF.
Analysts believe that the BTC ETF approval solidified its status as an institutional asset, while the ETH ETF will legitimize altcoins and pave the way for new highs in the next bull market. Furthermore, analysts predict that this greenlight will trigger a rally among L2 and DeFi OGs.
To support this point, we can look at the price movements of Ethereum layer-2s such as Optimism and Arbitrum, which experienced similar surges as ETH when the market rebounded after the ETF approval. Similarly, DeFi OGs like Uniswap and Aave also saw significant price increases, thanks to their direct ties to EVM technology.
The impact of the ETH ETFs on altcoins goes beyond just these examples. EVM-compatible projects like Avalanche and Polygon are expected to benefit more than Algorand in the next bull run. This is because EVM compatibility will become a crucial factor, especially now that ETH has gained regulatory clarity and generated hype around the project.
Additionally, decentralized exchanges (DEXs) and lending protocols will see mainstream adoption thanks to the simplicity and flexibility unlocked by the Ether ETFs. Analysts believe that projects offering the most functional utility will reap the most benefits. This creates a significant potential for DEXs like SushiSwap and Balancer, as well as borrowing/lending protocols like Aave and Compound.
Unfortunately for Ethereum competitors like Solana, analysts predict that they will struggle in the post-ETH ETF environment. However, Solana is still expected to reach new all-time highs, as the spot ETH ETF has provided the much-needed clarity for decentralized blockchains.
Technological developments like zero-knowledge proofs, which power many Ethereum layer 2s, and Real-World Asset (RWA) tokenization experiments will experience a revolutionary shift. Analysts believe that the approval of the ETH ETF will encourage more projects to build on Ethereum, with some transitioning from L1s to Ethereum rollups. Amidst all these developments, investors are advised to conduct thorough research before investing in any project and avoid getting caught up in excitement and market momentum during a bull run.
At the time of writing, ETH is trading at $3,827, experiencing a decline of 1.78% in the last 24 hours.