Ethereum, the second-largest cryptocurrency in terms of capitalization, holds a keen audience within the crypto community. Seeking insights into the upcoming month, we have asked experts for their Ethereum price predictions for August. So, here is what we have learned!
Ethereum price forecast for August by the pros
The experts have pinpointed two key factors influencing Ethereum’s trajectory: its correlation with Bitcoin and the regulatory pressures imposed by the US Securities and Exchange Commission (SEC) pressure. Let's dive into the details of these facets.
All about Bitcoin
Gracy Chen, the CEO of Bitget, offers an optimistic Ethereum (ETH) price prediction for August. She points at the growing volume of ETH being staked.
Staking is the intentional holding of coins in the project’s network, with the goal of upholding its stable functionality and earning the network's tokens.
The increased number of staked coins translated to a reduced pool of potential ETH sellers, resulting in a diminished likelihood of ETH experiencing a decline.
The green line is the number of validators within the Ethereum network. Validators are users equipped with the necessary tools to confirm transactions conducted on the cryptocurrency network. The blue line represents the amount of ETH being staked.
However, Chen cautions that Bitcoin’s influence remains pivotal despite the increased ETH amount in staking.
💬 "ETH will basically mimic BTC. It is expected that cryptocurrency will fluctuate in the range of $1700–2200," said Gracy Chen. She also noted that Ethereum could reach $2,500 if it can overcome the $2,200 resistance level.
The green horizontal line on the chart is the local maximum Ethereum can reach in August, according to Gracy Chen. The vertical blue line is the last day of August 2023.
Let’s break down how Ethereum’s “pegging” to Bitcoin operates:
🐘 Bitcoin, as the largest cryptocurrency in terms of market capitalization, currently occupies 48% of the entire digital asset market. In contrast, ETH's market share stands at 19%.
☝️ Bitcoin is the pioneering and most influential cryptocurrency, enjoying an association with the very essence of the crypto industry. This prominence is why BTC’s movements set the pace that the entire crypto market tends to follow.
To give you a quick recap, we have already unveiled a Bitcoin forecast for August 2023, suggesting that the coin might spend the whole month without even a shade of growth — just moving sideways. This stagnant sideways movement seems likely for Ethereum as well.
Gracy Chen believes that throughout the third quarter of 2023, ETH will continue to mirror BTC’s behavior. The rationale behind this prediction is rooted to the absence of any significant events for Ethereum that could create an independent trend for the coin. Consequently, ETH appears poised to keep on its movement akin to that of Bitcoin — sideways.
Sideways movement denotes a period of no growth; the asset’s value neither climbs nor descends, resulting in lateral motion.
Ethereum’s regulatory hurdles
Dmitry Noskov, an analyst at the StormGain crypto exchange, adopts a less optimistic stance for Ethereum’s prospects in August. He is worried about the SEC breathing down Ethereum’s digital neck.
💬 "Ethereum is in a difficult situation. On the one hand, the PoS-swift let it attract an army of investors: over the past 12 months, 9 million ETH worth $17 billion were put in staking. On the other hand, the US Securities and Exchange Commission (SEC) is trying to achieve security status for cryptocurrency. According to the watchdog, the opportunity to receive passive income [staking] that has opened up [with the Ethereum transition to the PoS algorithm] is the prerogative of the stock market," he noted.
According to Dmitry Noskov, the Ethereum price projection for August is closely tied to the ongoing Coinbase lawsuit. This legal battle involves one of the largest crypto exchanges, currently striving to safeguard its right to facilitate staking activities. In early June 2023, the SEC charged Coinbase with an illegal offering of unregistered securities. Notably, the Commission asserted that providing clients with staking-related tools also violates existing regulations.
It is important to underscore that Ethereum stands as one of the most popular crypto for staking. This context elevates the significance of the Coinbase case, as the outcome could have far-reaching implications. Should the SEC maintain its stance that staking controversies securities laws, Ethereum might be compelled to withdraw from staking activities. The potential fallout from such a scenario could manifest precipitous market sell-off, causing a decline in ETH’s price.
Worth noting is the perspective of the United States Internal Revenue Service (IRS), which regards staking as a source of additional income for the state treasury, which means it determines the process as a legal tender. As a result, US tax authorities require taxpayers to declare any coins received through staking.
The recent partial victory of the Californian crypto project Ripple over the SEC in July 2023 has provided a potential blueprint for resolving conflicts with the watchdog, and this extends to Coinbase and other projects that faced the SEC's pressure.
The Commission accused Ripple of illegally issuing and distributing an unregistered security in the form of the XRP token. The judge considered the accusations of the SEC unfair, concluding that Ripple’s violation pertained primarily to the sale of crypto to large investors. Conversely, the judge deemed the sale of XRP to individuals through crypto exchanges to be in accordance with law.
Following this logic, it becomes conceivable that the charges leveled against Coinbase may also rest on shaky ground. If the crypto exchange manages to secure a favorable outcome, this potential victory could pave the way for Ethereum's growth.
💬 "If the SEC fails, Ethereum will get a chance to skyrocket," Dmitry Noskov summed up his ETH forecast for August.
To buy or not to buy Ethereum?
So, the experts we talked believe that external factors will play a key role in ETH’s price movements.
☝️ First, Ethereum’s dance with Bitcoin continues. As history often echoes, the whole digital asset market repeats after BTC. Given our prior insights that August might see Bitcoin in sideslide, the same tune could potentially reverberate across Ethereum. If the forecasts turn out to be correct, ETH risks spending the last summer months without any serious price changes.
✌️ Secondly, the future of ETH appears to be intertwined with the unresolved conflict between the crypto industry and the SEC. The outcome of Coinbase's fight with the watchdog could play a crucial role, as it aims to validate the legitimacy of staking 200+ coins, including Ethereum. A positive resolution of this case could support ETH. Conversely, a negative outcome could lead to a dip in Ethereum’s price.
The Coinbase vs. SEC battle started in June 2023. As history has shown, showdowns between regulatory bodies and market participants often last for years and years on. For instance, Ripple has been defending its innocence for three years already. So far, the project has achieved only a partial victory. It is unlikely that Coinbase will solve its issue with the SEC in August. This constellation of events points to Ethereum's possible sideways throughout this month, which means we are unlikely to witness Ethereum ascend to the $2,500 mark prior to the summer’s end.
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This article is not an investment recommendation. The financial transactions mentioned in the article are not a guide to action. Itez is not responsible for possible risks. The user should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about making any operations with cryptocurrency.
