Ethereum was once seen as the most likely competitor to Bitcoin’s status as a prominent cryptocurrency, and the best positioned to make block chain technology more useful.
But with the value of Bitcoin and many other cryptocurrencies rising in recent months – thanks to President Donald Trump’s embrace – Ethereum has struggled to keep up with that rise, despite hosting the second most valuable digital token, Ether. While the value of Bitcoin has risen by about 160% over the past year, the value of Ether has only increased by 45%.
To help Token and its decentralized network regain some momentum, Ethereum founder Vitalik Buterin and the Ethereum Foundation he created are throwing their weight behind a new startup hoping to market Ether as Wall Street’s best cryptocurrency.
Vivek Raman, a former bond trader at Nomura Holdings and UBS Group AG, founded Etherealise with investments from Buterin and the Foundation. While Buterin confirmed the funding, she and Raman declined to disclose the amount of money involved. Raman said he and a team of eight full-time employees began work this month in New York, marketing Ethereum to financial companies while also building products that will make the network easier for banks to use.
“If there is any time when it will work, it is now when all the headwinds that existed in the past suddenly turn favorable, from regulation to technology to Ethereum’s readiness for institutional presence,” Raman said.”
Ethereum was launched by Buterin and a team of co-founders in 2015 and quickly gained a reputation as a smarter and more sophisticated alternative to Bitcoin. Ethereum’s new block chain is designed to host complex financial transactions in so-called smart contracts.
Ethereum under pressure from competition and investor interest
During the big cryptocurrency boom in 2017 and 2021, Ethereum was at the center of the event and its price rose much faster than Bitcoin.
But with the industry rebounding over the past year, Ethereum has been out of some of the trends. The biggest of these trends has to do with the increasingly widespread view that Bitcoin is a rare asset that could act as a digital alternative to gold. This idea has only gained momentum since Trump began talking about creating a national strategic reserve for Bitcoin last summer.
It has become much easier for investors of all sizes to treat bitcoin as an investment after the first US exchange-traded funds appeared on the exchange in early 2024. While ETFs were approved for Ethereum by regulators in July, they now hold only about a tenth of the assets in ETFs for Bitcoin in the U.S.
The spotlight has also turned to the growing world of Mc Coins, bustling projects that have attracted a lot of money from retail investors despite their limited practical purpose. Ethereum has hosted many of the oldest meme-based projects.
But now, many creators have instead for Solana, an alternative to Ethereum that has evolved more rapidly. Here, the Trump family launched the $TRUMP and $MELANIA currencies that came into the spotlight last week. Over the past year, Solana has appreciated faster than Ethereum or Bitcoin.
The Ethereum and Buterin Foundation have faced criticism from users for not moving faster to take advantage of the network’s first initiative feature. Buterin went to X last week to address critics, promising “significant changes” to the institution’s structure and goals.
Raman said Ethereum needs more outspoken supporters and hopes to deliver that on Wall Street.
Cryptocurrency Market Shifts as Institutional Investments Grow
The cryptocurrency market is about to transform as institutional investors increase their presence, especially through exchange-traded funds. Jeff Kendrick of Standard Chartered highlights this trend, noting that institutional flows will bring new capital into the market. Analysts expect the price of Bitcoin to reach $200,000 and Ethereum to hit $10,000 by the end of 2025. This upward trajectory results from long-term funds, such as pension funds, shifting their focus toward digital assets.
The impact of the launch of ETFs on the cryptocurrency market
The recent launch of exchange-traded funds by Kalamos introduces a new dynamic in the market. These exchange-traded funds not only help manage downside risks, but also affect the liquidity and pricing of options for Bitcoin. Gordon Grant, a cryptocurrency derivatives trader, points to the peculiar characteristics in the bitcoin options market due to these exchange-traded funds. “There is an interesting knot with expiration at the end of January,” he stated, stressing that regulated activities related to ETFs create unique patterns within the Bitcoin options landscape.
Market reactions and investor sentiment
Current market sentiment reflects a mixture of caution and optimism. While the price of Bitcoin recently fell around 3.8% to around $101,626, institutional impacts point to a long-term bullish outlook for digital assets. Calame’s ETF Chairman Matt Kaufman acknowledges the growing acceptance of Bitcoin as a legitimate investment asset, despite ongoing concerns about its volatility. Kaufman says: “Our new range of Bitcoin ETFs will offer downside protected a list of simple solutions designed to provide real risk management”, reinforcing the narrative that institutional frameworks could herald a new era for crypto investors.