Crypto on the verge of skyrocketing like Bitcoin

Bitcoin has increased by 324 per cent in 15 months and there’s another cryptocurrency that has all the ingredients to explode.

If you weren’t too hungover to grab some Bitcoin on New Year’s Day, you’d already be enjoying a sweet 57 per cent return as of today.

If you got your hands on Bitcoin on New Year’s Day in 2023, you’d now be sitting on an impressive 324 per cent return.

Not bad for a 12-month return. Even property in the Eastern suburbs of Sydney can’t match that kind of gain.

Is it time to fire that financial advisor who told you crypto was all a scam? Probably not. Crypto is still a volatile asset class and you should always conduct your own research before making an investment.

However, there’s a cryptocurrency that industry leaders think could potentially blow up in price just like Bitcoin did recently, possibly in just a few months.

This project has been around for a solid nine years and has garnered attention from celebrities like Paris Hilton, Snoop Dogg, and Reese Witherspoon.

We’re talking about Ethereum here, the second-largest cryptocurrency by market capitalisation.

This is because right now, some of the largest asset management firms globally, such as BlackRock, VanEck, and ARK Invest, are competing to launch a spot Ethereum exchange traded fund (ETF), just like they did with Bitcoin.

Bitcoin has seen a huge rise in the past six months.

Ethereum also looks set to have a moment.

The United States Securities and Exchange Commission (SEC) is anticipated to make a decision in May, following its approval of 11 asset management firms to launch spot Bitcoin ETFs earlier this year in January.

These were a turning point for Bitcoin, which had been experiencing a steady rise in price since December 2023 in anticipation of ETF approval by the 11 major asset management firms.

The product allows everyday retail investors to add Bitcoin to their portfolios, just like a stock, with the asset management firms required to buy the underlying asset, which is Bitcoin.

Applying the law of supply and demand, there are only 21 million Bitcoins in the world, and with demand shooting up, it tends to put increased upward pressure on price.

Just a fortnight ago, we saw $3.94 billion pouring into Bitcoin ETFs over a span of seven days. That same week, Bitcoin smashed its price record in Australia, hitting a jaw-dropping $111,440 on March 14 — the highest it’s ever been since it was created in 2009.

Bitcoin is currently valued at $107,001, while Ethereum is trading at $5508.

On New Year’s Day this year, Ethereum was trading at $3400, representing a similar jump to Bitcoin in 2024, of 55 per cent.

Bitcoin price is displayed at Pubkey Bar on February 29, 2024 in New York City. Picture: Michael M. Santiago/ Getty Images via AFP

Pav Hundal, lead analyst at Australian cryptocurrency exchange Swyftx, believes Ethereum’s price spike this year is “no doubt partly based on ETF speculation”.

Mr Hundal echoed a similar sentiment that high school economics can be used to forecast how Ethereum could potentially play out if an ETF is approved.

“It’s economics 101. For prices to rise you need demand and limited supply. We have a slower rate of Ethereum supply than we did two years ago. An ETF approval would provide the extra demand,” Mr Hundal said.

According to recent data, there has been a significant rise in the number of Australians purchasing Ethereum over the past year.

Adam Saville-Brown, global general manager of cryptocurrency tax software Koinly, discloses that the company’s data, looking at over 1 million customers’ crypto portfolios, primarily in Australia, indicates that Ethereum is increasingly becoming a preferred asset choice for many Australians.

“Data from the last year indicates a consistent quarterly growth in Ethereum holdings within Australian wallets, emphasising Ethereum’s growing trust as a long-term investment,” Mr Saville-Brown declares.

Estimating the price of crypto is tricky, given the number of factors involved, much like speculation in many investments. While ETF approval could boost prices, denial could certainly have the opposite effect.

Mr Hundal puts forth a potential price range but says “until May all bets are basically off”.

“The trading patterns today suggest Ethereum could strike somewhere between $8730 to $11,180 AUD,” he says.

Ethereum has seen a spike in interest in Australia. Picture: AFP

Meanwhile, CEO of Australian crypto exchange Independent Reserve Adrian Przelozny explains that there are a multitude of factors driving cryptocurrency prices, and hype is still a factor.

“Whenever you have an influx of more money coming into a market that tends to drive the price up. We’ve seen in the past with crypto markets, when the price goes up very quickly that causes a lot of attention in the news, and causes more people to look at it,” Mr Przelozny says.

Mr Przelozny clarified that although focusing on short-term gains for crypto may be tempting, adopting a long-term perspective is the wiser approach.

“It’s very hard to predict what the market will do next week, or next month,” he said. “However, if you zoom out a little bit there’s a trend that is already there, and there is every reason to believe that the trend will continue. But of course there are going to be ups and downs along that road.”

Disclaimer: The content provided is for informational purposes only. Please refrain from considering any of the above information as investment, financial, or other advice. It’s essential to conduct your own research before making any investment decisions.

Ciaran Lyons is a cryptocurrency market analyst, journalist and avid investor, with a background as a national radio presenter. He regularly contributes to global cryptocurrency publications and was one of the five Australians on the latest SBS series Filthy Rich and Homeless.