Ethereum Overtakes $700 for First Time Since 2018
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While Bitcoin has continued on a showstopping rally toward the $30,000 level, Etheruem has been quietly keeping up the pace in terms of yearly percentage growth.
Although Bitcoin has already broken its previous all-time high, Ethereum still has a bit more to go. In 2020, Ethereum has grown by 585% compared to Bitcoin’s 370% growth.
Ethereum may not be getting as much attention as Bitcoin lately, but reclaiming a $700 price level and an $80 billion market cap gas gotten many excited.
Ethereum Price Catalysts
There have been many fundamental factors and events that have made Ethereum a stronger and more usable platform.
The two largest factors are the growth of decentralized financial applications on Ethereum, and the transition to ETH 2.0.
At the beginning of 2020, there was less than $1 billion in total value locked (TVL) in ETH-based DeFi apps. Less than one year later, that number is closing in on $15 billion, representing a monumental increase in usage.
This addition in value on the network, as well as the users transacting across applications, shows the real-life feasibility of Ethereum as a network that can run decentralized financial applications.
Another major positive factor in the Ethereum ecosystem was the move from Proof-of-Work (PoW) transaction validation to Proof-of-Stake (PoS).
This transition took place as the network moved from ETH 1.0 to ETH 2.0. With this newly implemented verification mechanism, transaction speeds on the network will theoretically be faster and overall transaction fees should decrease.
Instead of running expensive and highly technical equipment to take part in validating the network and earning rewards, users can now stake their ETH directly in the staking contract to start earning. To date, there are over 2 million ETH in the staking contract, representing almost two percent of the total supply and 30 percent of the TVL in DeFi applications.
Growth From Institutional Investors
Besides the fundamental growth that Etheruem is experiencing, it’s also starting to get more mainstream attention.
Grayscale Investments, one of the leading digital asset management firms, has stated that it has institutional investors who are only interested in Ethereum — not Bitcoin. Grayscale has continued to grow its underlying ETH holdings for clients, closing in on $2 billion in ETH in its tradable Ethereum trust.
There is also the launching of Ethereum futures by the Chicago Mercantile Exchange, the world’s largest financial derivatives exchange. CME has previously launched Bitcoin futures, which seem to have done well enough to justify the creation of futures for the second-largest cryptocurrency.
All in all, considering the growth of Bitcoin and the cryptocurrency asset class, the fundamental enhancements of the Ethereum network, and the adoption of ETH by mainstream and institutional firms, Ethereum could continue to see its price rally to new highs along with Bitcoin.
The post Ethereum Overtakes $700 for First Time Since 2018 appeared first on BeInCrypto.
