Published on mei 25, 2024, 12:26 am
Image source: Fox News
```json { "TLDR": "Ether's price faces challenges due to stagnant network use, high fees, and regulatory uncertainty despite Ethereum spot ETF approval. Market anticipated approval resulted in profit-taking and subsequent drop. Ether is 24% below all-time high. Limited growth in DApps usage and increasing gas fees contribute to underperformance. Challenges include Miner-extracted value (MEV) issues and ongoing regulatory actions affecting market performance." } ```
Ether’s price performance is currently facing challenges due to several factors including stagnant network use, high fees, and regulatory uncertainty. Despite the recent approval of the Ethereum spot ETF by the U.S. Securities and Exchange Commission (SEC), Ether failed to sustain its price above $3,800 on May 24. This unexpected drop from $3,943 just two days earlier left many traders puzzled.
The market had been eagerly awaiting the SEC’s decision, but some pointed out that individual S-1 statements from each issuer are yet to be approved by the SEC, a process that could take significant time. This delay, along with other factors like high transaction fees and uncertain regulations in the U.S., has contributed to Ether’s underperformance.
Following the anticipation of the spot ETF approval, there was a surge in profit-taking leading up to the announcement which resulted in a 23% rally on May 20; a classic case of “selling the news”. Though excitement surrounded the ETF approval, Ether is still 24% below its all-time high of $4,868 set in November 2021. In comparison, Bitcoin is trading only 7% below its peak from March 2024 hinting at additional factors hindering Ether’s growth.
Despite recent developments, statistics over the last month reveal little growth in decentralized applications (DApps) usage within the Ethereum network as seen through metrics such as total value locked (TVL) which dropped by 6%. Furthermore, leading DApps showed decreasing activity levels indicating potential limitations in attracting users amidst competitive offerings with lower fees.
Ethereum faces another challenge with Miner-extracted value (MEV) posing issues causing network congestion and increased gas fees. Vitalik Buterin proposed protocol-level controls to mitigate MEV concerns; however, a viable solution may not surface soon.
The approval of ETH as a digital commodity through the spot ETF marks a positive regulatory milestone according to Paul Grewal, Coinbase’s Chief Legal Officer. Nevertheless, ongoing regulatory actions against industry players like Consensys and Ethereum Foundation continue to fuel uncertainty affecting Ether’s performance negatively.
In conclusion: while recent shifts have shaped Ether’s trajectory including a notable regulatory nod with ETF approval yet crucial challenges persist around network utilization and regulatory clarity impacting its market performance significantly.
Original article posted by Fox News
