Why Ethereum Has Always Hit High Like The Bitcoin Price Flats

Ethereum, the world’s second largest cryptocurrency by value after bitcoin, broke ground today for the first time since early 2018.

The ethereum price, which is traded as the digital token ether, usually moves alongside the bitcoin price – but has risen higher over the past week as bitcoin trades sideways (though some smaller cryptocurrencies have made much larger gains).

Ethereum’s massive rally, which has seen it climb nearly 300% since bitcoin and other cryptocurrencies began in early October, is believed to be largely driven by the emerging decentralized finance (DeFi) market – the idea that bitcoin and cryptocurrency technology can be used to recreate traditional. financial instruments such as loans and insurance.

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Ethereum rose to $ 1,439 per ether token earlier today, according to CoinDesk’s price index, surpassing its previous all-time high of $ 1,432.

“2020 saw the explosion of the DeFi ecosystem on ethereum – hitting $ 1 billion worth of total first locked in February, now $ 20.5 billion in just 11 months,” Brian Norton, MyEtherWallet’s chief operations officer, said in comments on e email. “This growth has attracted many new users seeking a product that is not available on bitcoin with central intermediaries.”

Last year, ethereum initiated a long-awaited upgrade designed to improve scalability and security and will see the ethereum network move from the proof-of-work (PoW) consensus algorithm to the test-share (PoS) algorithm.

Essentially, this will mean that recipients of ethereum ether tokens as a reward for maintaining the network will be removed from the process to ensure the best settlement of transactions – with ethereum users able to deposit their tickets to secure the network and win prizes instead.

The anticipated hot launch of ethereum 2.0, along with the booming DeFi market almost entirely built on top of the ethereum blockchain, has caused developers to pile up on the network.

“What I’m watching is developer activity on ethereum, as it’s an indicator that new and better use cases are coming that will increase demand for the native asset,” Norton added. “Ethereum has over five times the number of active developers like bitcoin, and adds developers at a faster clip every day.”

It is hoped by many in the bitcoin and crypto community that the upgrade will help ethereum cope with increasing demands on its network.

“While the explosion of projects at DeFi has caused increasing pains for ethereum, layering solutions are in the works that help the network scale,” said Paolo Ardoino, chief technology officer of Bitfinex-registered crypto exchange Hong Kong, which is headquartered in Hong Kong, said via email.

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Meanwhile, the ethereum rally doesn’t mean that bitcoin, which recorded its own record high of over $ 42,000 per bitcoin earlier this month before falling back a bit, has been eliminated.

Bitcoin slashed through its late 2017 peak of about $ 20,000 in December as institutional investors warmed up to the cryptocurrency and payment giants like PayPal


added their support.

“The sentiment around bitcoin remains extremely bullish,” Ardoino said. “Bitcoin provides a solid foundation for a stunning array of projects, some of which will fundamentally change the nature of money by the end of the decade. Those celebrating the rise of competitive chains in a fast-paced bull crypto market should do well to remember that’s what they owe everything to bitcoin. “

Looking ahead, long-suffering cryptocurrency traders, triumphant after bitcoin and crypto return to glory following a three-year bear market, feel unbeatable for ethereum.

“I think it’s very feasible for ethereum to hit $ 2,500 in 2021, as it also benefits from the extended crypto-asset bull run we’re seeing right now,” said Simon Peters, crypto analyst -tacks at eToro brokerage in email comments. “Today’s record high of $ 1,419 could be the start.”