Ethereum Hits 22-Month High as Dencun Upgrade Nears

The Ethereum upgrade is expected to make L2s much cheaper to use

By: André Beganski

February 26, 2024

GM! This week: Ethereum surpasses $3,000 as Dencun nears, Reddit reveals its crypto holdings in an IPO filing, Kraken files a motion to dismiss its SEC lawsuit, Worldcoin pumps after Nvidia’s big day, and Donald Trump acknowledges Bitcoin’s believers.

Ethereum’s Rise

For the first time in 22 months, the price of Ethereum is above $3,100, a sight not seen since April of 2022 — just one month before Terra’s UST and LUNA tokens swiftly imploded and thrust the digital assets industry firmly into a state of Crypto Winter.

Rising 9% over the past week, Ethereum’s increase comes as developers look toward the network’s Dencun upgrade. Slated for March 13, the upgrade is expected to bolster Ethereum’s scalability and reduce transaction costs on layer-2 Ethereum networks.

Describing it as “a new era for Ethereum,” Grayscale Research said in a blog post on Friday that anticipation for Dencun is driving Ethereum’s recent rally. Last week, meanwhile, Grayscale CEO Michael Sonnenshein said that the SEC approving spot Ethereum ETFs is “a matter of when, not a matter of if.”

Reddit’s Disclosure

As the social media giant Reddit prepares to go public, the platform disclosed it invested some excess cash in Bitcoin and Ethereum, according to a report from CoinDesk last week. While the company did not disclose the value of its digital asset holdings, Reddit described the assets’ value as “immaterial” in a filing with the Securities and Exchange Commission.

Introducing collectible avatars in 2022 that were built as Polygon NFTs, Reddit’s crypto-based initiative has garnered notable traction. Over 30 million Reddit users now hold collectible avatars in a digital wallet, according to a Dune dashboard. In total, the endeavor has translated into $36 million worth of NFT sales for Reddit across 390,000 avatars since they were introduced.

Amid crypto’s comeback, companies that have already gone public are benefiting from their proximity to crypto. For example, stock in Jack Dorsey’s Block surged 18% last week to $79 per share after the firm reported total customer sales of $2.5 billion worth of Bitcoin in the fourth quarter of last year. Additionally, the firm reported it held around 8,000 Bitcoin in its corporate coffers.

Kraken’s Motion

The San Francisco-based cryptocurrency exchange Kraken filed a motion to dismiss its lawsuit from the SEC last week, which accuses the exchange of failing to register with the regulator and commingling customer funds.

Notified about the lawsuit a day after Kraken’s legal chief, Marco Santori, testified before Congress regarding SEC overreach in May, the exchange claimed the SEC is acting as “a politically compromised agency,” per Fortune.

The regulator’s lawsuit against Kraken mirrors enforcement actions against other exchanges: Binance and Coinbase. At each lawsuit’s heart is whether certain digital assets fall under the regulator’s regulatory remit as securities. At the same time, a digital asset company called LEJILEX and the Crypto Freedom Alliance of Texas (CFAT) filed a lawsuit against the SEC for its regulatory approach, assailing the agency’s approach to regulating crypto as unlawful.

While Kraken’s motion to dismiss was expected, SEC lawyer Ladan Stewart’s departure from the agency last week was a surprise for some. After leading the SEC’s crypto unit, including enforcement actions against Coinbase and Ripple, she moved on to law firm White & Case LLP to develop a crypto and cyber defense practice.

“Crypto is here to stay—that’s become very clear with the launch of a slew of Bitcoin” ETFs, she said in an interview with Bloomberg Law, adding that “legal questions surrounding crypto” will persist for some time given the industry’s “complex and … turbulent” regulatory environment.

Worldcoin’s Gains

Nvidia's blockbuster Q4 2023 earnings not only benefited the stock market — fervor for AI and ChatGPT maker OpenAI has stoked interest in Worldcoin. Even though Wolrdcoin’s recent rise began following the release of Sora, a text-to-video AI model developed by OpenAI, Worldcoin’s WLD token surged 40% last Thursday, pushing its market cap above the $1 billion mark.

The pace of Nvidia’s gains last week also represented a historic jump. Growing its market capitalization by $277 billion in a single trading day, the company notched the biggest daily gain for a Wall Street company on record — lifting much of the stock market along with it.

Sam Altman, the CEO of OpenAI, is also a co-founder of Tools For Humanity, which backs Worldcoin. Even though the two projects have no direct link, Altman’s association with both projects could explain much of the token’s recent gains.

However, that’s making a few uneasy, including Blockworks co-founder Michael Ippolito, who said the project is “going to end in tears” for many investors that follow the hype on X. “The worst part is the MSM will take it seriously because of its ties to Sam Altman,” he said in a post on Sunday.

Trump’s Acknowledgement

He may have said that Bitcoin “just seems like a scam” in 2021, but former U.S. President and leading Republican candidate Donald Trump is changing his tune on Bitcoin. Speaking at a recent town hall on Fox News, he appeared somewhat sympathetic toward the asset’s growing popularity among younger Americans and less suspicious of its value.

“I always liked one currency. I call it a currency. I like the dollar, but a lot of people are doing it [Bitcoin] and frankly, it's taken on a life of its own,” Trump said. “You probably have to do some regulation, as you know, but many people are embracing it. And more and more, I'm seeing people wanting to pay Bitcoin, and you're seeing something that's interesting, so I can live with it one way or the other.”

Some Bitcoiners attributed Trump’s about-face to former presidential candidate and entrepreneur Vivek Ramaswamy, who swiftly backed Trump after dropping out of the race in January. Aside from upholding Bitcoin, Ramaswamy was outspoken against the Federal Reserve and Central Bank Digital Currency on the campaign trail, expressing similar concerns with the technology to that of Florida Governor Ron DeSantis and Robert F Kennedy Jr., who is running for president as an independent.

As Trump charts a new path on Bitcoin, Republicans could be positioning crypto as a wedge issue for elections later this year. Putting the so-called crypto vote to the test, in Massachusetts, crypto lawyer John Deaton announced a Senate bid against long-time representative Elizabeth Warren, an outspoken critic of crypto.

Other Headlines Around Crypto

  • Yuga Labs Founder Garga Returns as CEO to ‘Unshackle’ Bored Ape Team (Decrypt)

  • UNI Soars 60% On Fee Switch Proposal (The Defiant)

  • First Ever Photos of Sam Bankman-Fried from Jail at MDC (Tiffany Fong)

Last Chance to Upgrade Your Coinage Membership!

Coinage is the fastest-growing name in Web3 media. Co-own our outlet and unlock exclusive benefits by minting one of our Membership Passes today! Subscribe to our Substack to stay up-to-date on all the top stories in crypto.


View All