The recent endorsement of the ETH ETF is said to have sparked a significant revolution among altcoins, particularly L2 and DeFi OGs, who are expected to rally in response. However, projects that have been labeled as “Ethereum killers” may struggle to keep up in the post-ETH ETF era.
The recent approval of Ether Exchange Traded Funds (ETFs) has caused a short-term surge, propelling Bitcoin to the $70k range and Solana back to the $180 region. However, certain external factors, as highlighted by Crypto News Flash, have turned market sentiments 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 and set new all-time high prices.
With this development, it is expected that altcoins will dominate the market, as seen when Bloomberg analysts revised the approval chance from 25% to 75%. During that time, ETH surged by 20% and reached over $3,800, underscoring the significance of this development for Decentralized Finance (DeFi) compared to the approval of a spot Bitcoin ETF.
To analysts, the approval of a BTC ETF solidifies its status as an institutional asset, while the ETH ETF legitimizes altcoins and positions them for new highs in the next bull market. Additionally, analysts anticipate that this greenlight will trigger a rally for L2 and DeFi OGs.
To support this point, it is worth noting that Ethereum layer-2s like Optimism and Arbitrum experienced similar price movements as ETH when the market rebounded after the related ETF approval. Similarly, DeFi OGs like Uniswap and Aave also saw high double-digit percentage price increases due to their direct ties to EVM technology.
The complete launch of Ether ETFs is also expected to impact EVM-compatible projects. This means that Avalanche and Polygon have a better chance than Algorand in the next bull run. The reason for this is that EVM compatibility will become an even more crucial factor now that ETH has gained regulatory clarity and generated hype around the project.
In addition to the above, decentralized exchanges (DEXs) and lending protocols will see increased adoption due to the simplicity and flexibility unlocked by Ether ETFs. Analysts believe that projects offering the most functional utility will benefit the most, creating 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 predict that they will face significant challenges in the post-ETH ETF era. However, Solana is still expected to reach new all-time highs since the spot ETH ETF has provided the necessary clarity for decentralized blockchains.
For technological advancements like zero-knowledge proofs, which power many Ethereum layer 2s, and Real-World Asset (RWA) tokenization experiments, there will be a revolutionary impact. Analysts believe that the approval of the ETH ETF will encourage more projects to build on Ethereum, with some transitioning from L1s to Ethereum rollups. Amidst all of this, investors are advised to conduct thorough research before investing in any project and to avoid getting caught up in the excitement and momentum of a bull run.
At the time of writing, ETH was trading at $3,827, experiencing a decline of 1.78% in the last 24 hours.