The recent approval of the ETH ETF has sparked a major revolution within the altcoin market, particularly among L2 and DeFi OGs who are expected to rally. However, projects that have been labeled as “Ethereum killers” may be left behind in the post-ETH ETF era.
The approval of Ether Exchange Traded Funds (ETFs) has caused a short-term rally, pushing Bitcoin up to the $70k range and Solana back to around $180. However, certain external factors, as highlighted by Crypto News Flash, have turned market sentiment against further bullish continuation, resulting in the assets stabilizing just below critical resistance levels. Interestingly, analysts believe that the approval of S-1 registration statements will trigger another rally, leading to new all-time high prices.
If this happens, altcoins are expected to dominate the market, just as they did when Bloomberg analysts increased their approval chance from 25% to 75%. During that time, ETH surged by 20% and reached over $3,800, highlighting the importance of this development for Decentralized Finance (DeFi) compared to the approval of a Bitcoin ETF.
Analysts believe that the approval of a BTC ETF solidified its position 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 green light will trigger a rally for L2 and DeFi OGs.
To support this point, it is worth noting that Ethereum layer-2s such as Optimism and Arbitrum experienced similar price movements 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 ETH ETFs on altcoins goes beyond the aforementioned points. EVM-compatible projects are expected to be affected as well. This means that projects like Avalanche and Polygon have a better chance than Algorand in the next bull run. EVM compatibility will become a more important factor, especially now that ETH has gained regulatory clarity, generating hype around the project.
Additionally, decentralized exchanges (DEXs) and lending protocols will open up to mainstream adoption due to the simplicity and flexibility brought by the Ether ETFs. Analysts believe that the projects offering the most functional utility will benefit the most. 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 believe they will face significant challenges in the post-ETH ETF era. However, Solana is still expected to reach new all-time highs, as the spot ETH ETF has provided the necessary clarity for decentralized blockchains.
Technological developments such as zero-knowledge proofs, which power many Ethereum layer 2s, and Real-World Asset (RWA) tokenization experiments, will experience a major revolution as a result of the approval of the ETH ETF. According to analysts, more projects will build on Ethereum, with some transitioning from L1s to Ethereum rollups. In light of all these developments, investors are advised to conduct thorough research before investing in any project and to avoid getting caught up in excitement and market momentum during a bull run.
As of now, ETH is trading at $3,827, experiencing a decline of 1.78% in the last 24 hours.