Ethereum is on top, despite its limitations

Last week Ethereum outranked Bitcoinhowever, there are limitations to Ethereum technology, and JPMorgan analysts suggest that given the network activity, the price of ETH should be significantly lower. In addition, many applications have been made in the United States for creation of cryptocurrency exchange fundshowever, they may face new obstacles.

About the author

Anders Nysteen - joined Saxo Bank in 2016 to the department Quantitative Strategiesand its main goal is to develop mathematical trading strategies and asset allocation models. Anders holds a degree in physics and nanotechnology from the Technical University of Denmark and a PhD in quantum photonics.

Ethereum has surpassed Bitcoin, but is struggling with problems

In terms of market dominance, Ethereum has achieved a record share of almost 20%; Last week, ETH gained 15% while Bitcoin's return was almost nil. The use of Ethereum is supported by smart contracts used for many purposes (including non-financial) in blockchain technology in the Ethereum network, and the amount of ETH blocked in these smart contracts last year has grown significantly. 

However, Ethereum faces some challenges as other cryptocurrencies using smart contracts or similar technologies compete with Ethereum for smart contractsby downloading lower transaction fees than Ethereum. In addition, reports indicate that 2-5% of transactions on Ethereum-based decentralized exchanges fail. Finally, JPMorgan analysts suggest the price of ETH should be 75% lower, taking into account network usage and activity.

ETF applications are still pending in the US

Supporters of cryptocurrency exchange funds see the launch of these instruments in the United States as a way to increase the availability of cryptocurrency trading, and thus - the number of active traders / users. Although, inter alia, in Canada cryptocurrency funds are already operating, in the United States, applications for their creation are still pending; not a single application in this regard has yet been approved. 

To process your application, the U.S. Securities and Exchange Commission (Securities and Exchange Commission, sec) requires suppliers ETF having a stock exchange partner. To the group of fund providers based on the stock exchange she joined recently a company Wise Origin and like three other entities, it filed a pending SEC decision. Such applications were also submitted by many other suppliers not cooperating with any exchange. SEC president Gary Gensler, most recently handed over to Congressthat the crypto market "could benefit from greater investor protection," suggesting that there is a further need for regulation before the SEC can approve the creation of any of the cryptocurrency funds, further reducing the likelihood of approval of submitted applications.