Shades of Gray: Ether Dencun Upgrade Pushes Prices Higher

Despite the impending approval of the spot ethereum ETF, Grayscale experts believe the reason behind the recent price increase is an upcoming technical improvement.

Grayscale research analyst William Ogden Moore said in a Feb. 23 report that Ethernet’s Dencun upgrade likely triggered the rise in ethereum ( ETH ) prices. According to CoinMarkerCap, ETH is up 34% in the past 30 days and 28% year-to-date, according to TradingView.

William Ogden Moore, analyst at Grayscale Research, said that Bitcoin Miner

“Ether’s Dencun upgrade, scheduled for March 13, 2024, is a big step forward that could help Ether compete with faster chains in the smart contract platform crypto space, such as Solana, in terms of scalability. We believe recent price performance reflects the market’s expectations for this upgrade.”

ETH 30D Price Chart | Credit: CoinMarketCap

Dencun promises to increase throughput and reduce transaction costs, allowing users to spend less on Gas fees and transact more on ETH’s mainnet and Layer 2 extension solutions like Arbitrum.

The developers plan to implement this key change by introducing data blobs through raw danksharding.

Moore’s report suggests that Ether could take a larger share of the smart contract business from competitors such as Solana if the network is able to offer cheaper fees, which Moore believes could unlock a multibillion-dollar market associated with real-world assets.

William Ogden Moore, analyst at Grayscale Research, adds.

“If Ether can become more competitive in terms of throughput and cost, it could position itself to capture smart contract applications that require high levels of security and censorship resistance, such as stablecoins or tokenized financial assets.”

Grayscale’s bullish outlook on ETH and its blockchain complements the investment firm’s bid for spot exchange-traded funds after successfully converting GBTC last month. The firm hopes to do the same for its Grayscale Ether Trust (ETHE), which has more than $7 billion in assets under management (AUM), according to Yahoo Finance.Bitmain Miner

The U.S. SEC, like several other issuers, delayed a decision on Grayscale’s application until May.

ETH year-to-date chart | Source: TradingView