Mike McGlone, a Bloomberg strategist , asserts that the Fed’s adverse policies and Ethereum’s bleak technical backdrop can impede development.
Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, is experiencing a rough week after the US Securities and Exchange Commission (SEC) submitted securities violation charges against Binance and Coinbase Exchanges, respectively. At the time of writing, the price of Ethereum was $1,844.24, a decrease of 0.84% over the previous 24 hours and 1.2% over the last seven days.
Mike McGlone, a senior macro strategist at Bloomberg Intelligence, commented on the outlook for Ethereum by highlighting the critical protocol metrics that can boost the cryptocurrency and the negative sentiments that can generally slow development. On Twitter, he stated that the current decreasing supply of Ethereum is beneficial 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, 2023This dwindling supply is negated, however, by low demand and adoption. Assuming the decreasing supply coincides with high demand, the procurement of Ether, the utility token of the protocol, will skyrocket, resulting in a price increase.
The leading market strategist also cited the impact of unfavorable Fed and technical conditions at the beginning of June as a significant factor that could limit Ethereum’s price growth potential.
Ethereum’s Exemption
This week, the SEC focused on other altcoins, including Cardano (ADA), Solana (SOL), Filecoin (FIL), and Decentraland (MANA).
SEC Chairman Gary Gensler once commented on Ethereum’s securities status following the protocol’s Merge event that transformed it into a Proof-of-Stake (PoS) blockchain, even though it is not currently on the regulator’s purview.
The current reality is that Ethereum is as risky as other digital currencies designated by the regulator, and depending on how long-term events play out, this may affect the coin’s growth prospects.
Ethereum has maintained its position as the second-largest cryptocurrency after Bitcoin. Despite the current pessimistic outlook, there is no doubt that it will continue to hold this position for the foreseeable future.
