According to a new CoinDesk report, Coinbase suggests Ethereum might outperform expectations despite lagging behind the crypto market so far in 2024.

While Ethereum's price has increased 29% this year, that's less impressive compared to Bitcoin's 50% gain and the broader market's 28% rise. However, Coinbase analysts believe Ethereum has room for growth.

They point out that unlike some other cryptocurrencies, Ethereum doesn't face issues like a sudden increase in token supply. Instead, features like staking and layer 2 solutions are actually reducing the amount of Ethereum readily available for trading.

Furthermore, Ethereum's strong position in decentralized finance (DeFi) is likely to continue, thanks to the widespread adoption of its technology by other blockchains.

Finally, the potential approval of a U.S. exchange-traded fund (ETF) for Ethereum could be a major boost. Coinbase believes the market might be overlooking the possibility of approval soon, and even if it's initially rejected, legal challenges could lead to a reversal.

Overall, Coinbase sees Ethereum's long-term outlook as positive, with strong underlying demand and continuous innovation within its ecosystem. They believe these factors will allow Ethereum to benefit from multiple positive trends in the crypto market.

Resources:

CoinDesk