Ethereum broke through the $ 700 level for the first time since May 2018.
Ethereum locked in DeFi has increased by 1,500%.
The transition to Ethereum 2.0 has probably played a positive role.
As Bitcoin continues its spectacular rally towards the $ 30,000 level, Ethereum has quietly kept pace in terms of annual percentage growth.
Although Bitcoin has already surpassed its previous record, Immediate Edge still has a bit more to do. In 2020, Ethereum rose 585 % from Bitcoin’s 370% growth.
Ethereum may not be gaining as much attention as Bitcoin lately, but the recovery from the $ 700 level and a market cap of $ 80 billion has generated a lot of excitement.
Ethereum Price Catalysts
There are many fundamental factors and events that have made Ethereum a more solid and more usable platform.
The two main drivers are the growth of decentralized financial applications on Ethereum and the transition to ETH 2.0.
At the start of 2020, the Total Locked-In Value (TVL) in ETH-based DeFi apps was less than $ 1 billion. Less than a year later, that figure is approaching $ 15 billion, which represents a monumental increase in its use.
This addition of value to the network, as well as the users transacting between applications, shows the real feasibility of Ethereum as a network capable of running decentralized financial applications.
Ethereum Miners Value
Another major positive factor in the Ethereum ecosystem has been the shift from validation of Proof of Work (PoW) to Proof of Stake (PoS) transactions.
This transition took place when the network changed 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 are expected to decrease.
Instead of using expensive and highly technical equipment to participate in network validation and earn rewards, users can now wager their ETH directly into the staking contract to start earning. To date, there is over 2 million ETH in the staking contract, which is almost 2% of the total supply and 30% of the TVL in DeFi applications.
Growth of institutional investors
Along with Ethereum’s fundamental growth, the network and its assets are also starting to gain more mainstream attention.
Grayscale Investments , one of the leading digital asset management companies, said it has institutional investors who are only interested in Ethereum, not Bitcoin. Grayscale continued to grow its underlying ETH holdings for its clients, approaching $ 2 billion in ETH.
In 43 days the CME $ ETH futures will go live.
There’s also the launch of Ethereum futures by the Chicago Mercantile Exchange, the world’s largest financial derivatives exchange. The CME has already launched Bitcoin futures, which appear to have worked well enough to warrant the creation of futures for the second largest cryptocurrency.
Overall, given the growth of Bitcoin and the cryptocurrency asset class, fundamental improvements in the Ethereum network, and the adoption of ETH by consumer and institutional businesses, Ethereum may continue to see its course reaching new heights with Bitcoin.