Ethereum (ETH) cannot be stopped: While the Bitcoin (BTC) price is resting, the second-largest cryptocurrency in the world is making a new all-time high, and some tokens from Decentralized Finance (DeFi) are also reaching new highs. What’s next?
For the first time in three years, Ethereum is making a new all-time high. The last time the ether price was above the $ 1,400 mark was on January 13, 2018.
In the night from yesterday Sunday to today’s Monday, the second-largest cryptocurrency broke the old all-time high and reached a new high of 1,459 US dollars.
In the last 30 days alone, Ethereum recorded a price increase of more than 120 percent. In addition, Ether is one of the top performers within the ten largest cryptocurrencies. At the time of going to press, ETH had a market capitalization of just under $ 164 billion.
But what are the reasons for this enormous increase and why could this only have been the beginning of a major altcoin rally?
In the past, a decline in the BTC held by exchanges in Bitcoin has led to a price explosion, provided that demand remained high.
The same phenomenon can now also be observed with Ethereum. Investors withdrew more and more ethers from exchanges in recent months. Many of these investors are long-term oriented and use ETH for staking or within DeFi protocols.
The world’s largest futures exchange, the Chicago Mercantile Exchange (CME), announced on December 16 last year that it plans to introduce Ether futures by February 8.
Futures are essentially traded contracts that allow investors to bet on the future price of an underlying asset.
The announcement came almost three years after CME introduced Bitcoin futures. Ultimately, the Ethereum futures will contribute to the maturity of Ethereum and ensure more liquidity in the market.
This offers institutional investors, in particular, the opportunity to open positions in the crypto space, as they can better hedge their risk in the extremely volatile crypto market.
By being able to hedge their opened positions through futures, they will be able to better invest in Ethereum. Simply put, the futures make Ethereum a more attractive investment for institutional investors.
In addition, there is a major difference in this Ether price rally to past price explosions. This time the price increase is not based solely on speculation and hype, as during the Initial Coin Offering (ICO) boom in 2017 and 2018.
In the meantime, the Ethereum ecosystem has grown up, and many DeFi protocols generate seven-figure income every day. Since you need Ether to use DeFi applications, the success of many applications from Decentralized Finance naturally also benefits Ethereum.
The Ethereum ecosystem is booming: prices in the DeFi sector have exploded within the last 24 hours.
Many well-known projects such as UniSwap (UNI), Compound (COMP), Aave (AAVE), and SushiSwap (SUSHI) recorded price increases in the double-digit range. The CEO of the payment provider Circle suspects that this is just the beginning of another price rally in the DeFi sector.
In addition, Chris Burniske, a partner at Placeholder Capital, believes that sustained strength in the Ethereum rate could very likely result in further price increases in the altcoin market.
Burniske feels reminded of the altcoin rally in March 2017 and therefore expects that there could be dramatic price increases on the altcoin market in the next few weeks.
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