Ethereum (ETH), the world’s second largest cryptocurrency by market capitalization is not having the best of week following the upset the industry received as the US SEC filed securities violation charges against Binance and Coinbase Exchanges respectively. At the time of writing, Ethereum was changing hands at a price of $1,844.24, down by 0.84% over the past 24 hours and by more than 1.2% in the trailing 7-day period.
Commenting on the outlook of Ethereum, Mike McGlone, Bloomberg Intelligence’s Senior Macro Strategist pointed out the key protocol metrics that can boost the cryptocurrency and the negative sentiments that can generally slow down growth. Taking to Twitter, he said Ethereum currently has a diminishing supply, a feature that is good for the protocol.
Solid Ethereum Supply/Demand vs. Fed, Weak Technicals: BI Crypto. Demand and adoption appear to be low and rising vs. diminishing supply, which is positive for the #Ethereum (ETH) price, but an unfavorable Fed and technical backdrop at the start of June may keep a lid on prices pic.twitter.com/CFKoADdk5N
— Mike McGlone (@mikemcglone11) June 8, 2023
This diminishing supply, however, is negated by a low demand and adoption. Assuming the diminishing supply is matched with a high demand, the acquisition of Ether, the utility token of the protocol will soar, hence a push in its price. The top market strategist also pointed out at the impact of unfavorable Fed and technical backdrop at the start of June as a major factor that can put a lid on the potential growth in the price Ethereum.
The Ethereum Exemption
The securities status of Ethereum was not a subject of conversation this week as the SEC generally dwelt on other altcoins such as Cardano (ADA), Solana (SOL), Filecoin (FIL) and Decentraland (MANA) amongst others.
Though not currently on the regulator’s radar, SEC Chairman Gary Gensler has once commented on Ethereum’s securities status following the protocol’s Merge event that turned it into a Proof-of-Stake (PoS) blockchain. The current reality is that Ethereum is as unsafe as the other digital currencies that have been designated by the regulator and depending on how events shapes up in the long term, it may impact the growth outlook of the coin.
Ethereum has maintained its ranking as the second largest after Bitcoin and despite the current bearish outlook, there is no doubt it will maintain this position for much longer.