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Why Ethereum and AI Tokens May Be Your Best Bet in Q3
- According to new research, Ethereum is poised to have a positive quarter.
- AI tokens have dominated the social space and have seen positive results year-to-date.
Ethereal [ETH] and AI tokens have performed positively in recent months.
Interestingly, Grayscale Research believes that the next quarter will be heavily influenced by the recent approval of spot Ether exchange-traded products (ETPs) in the US market.
This is a significant development as the Securities and Exchange Commission (SEC) gave the green light to the filing of Form 19b-4 in late May, allowing several issuers to list these Ether ETPs on US exchanges.
ETPs to help ETH
Grayscale’s market analysis assumes that ETPs will begin trading in the third quarter of 2024.
Similar to the successful launch of spot Bitcoin ETPs in January, Grayscale Research expects these Ether products to attract significant net inflows, although likely to a lesser extent than their Bitcoin counterparts.
This could potentially result in price support for Ethereum itself and the tokens within its ecosystem.
The launch of Ethereum spot ETPs is expected to further focus attention on the unique features of the Ethereum network. Unlike other blockchains, Ethereum uses a modular design approach, where different infrastructure components work together to optimize user experience and reduce costs.
Additionally, Ethereum boasts the largest decentralized finance (DeFi) ecosystem in the cryptocurrency industry and is a hub for tokenization projects.
The increased interest and adoption of Ethereum fueled by the ETP approval could lead to increased activity and valuation support for specific Layer 2 tokens like Mantle, major DeFi protocols like Uniswap, Maker, Aave, and other crucial assets within the Ethereum network like Lido, a staking protocol.
A key factor that could show how interest in Ethereum has grown could be how the price of ETH has remained resilient while BTC prices have collapsed.
While both ETH and BTC are highly correlated, the recent market declines have not impacted ETH as severely as they have BTC.
Source: Santiment
While spot Ether ETPs are an important development, Grayscale Research expects other ongoing market themes to continue to be relevant in the coming quarter.
A key area of focus will be the potential for blockchain technology to interact with the field of artificial intelligence (AI).
Are AI tokens doing well?
According to recent data, AI tokens have had the greatest predominance in the social media landscape.
Source: Grayscale Research
Additionally, AI tokens such as RNDR, TAO, and FET have outperformed the overall crypto market index in terms of year-to-date price performance as well. If the hype around AI tokens continues, it could yield positive results for holders.
Source: Greyscale