6 reasons why Ethereum price is growing
According to CoinMarketRate, Ethereum continues pushing to new record heights as yesterday ETH price reached $1756 for the first time in its history. Since then, the ETH price has declined to $1674 at the time of writing.
Ethereum price growth analysis
As ETH prices surpassed $1700 for the first time ever, Paolo Ardoino, Bitfinex technical director, shared his thoughts on the growing ETH popularity.
“Ethereum seems to be skyrocketing, as it reaches another maximum surpassing $1700. The second largest according to market capitalization currency has a lot of reasons for promoting. Sceptics may concentrate on various issues and problems the currency face but who hackers and programmers enjoy solving these problems.
Ether has been designed as a currency for supporting an ecosystem of applications and we are still at the beginning of this long way. Besides the upcoming launch of CME futures represents another stage at the way towards announcing the cryptocurrency as a new recognized class of assets». Below are six reasons why ETH demonstrate such a big force and why its price continues to grow
1. Large number of major broker companies have restricted transactions and as a result a lot of retail WSB (WallStreetBets) investors put funds into the decentralised market of cryptocurrenies.
WBS – Is a group of retail investors in the USA that have united their effort against short Wall Street sellers by aiming at the number of short stocks of hedge funds mainly GameStop (GME) и AMC. After a coordinated attack from WSB, leading broker companies such as Robin Hood started to restrict the purchases of some aim stocks of WSB like AMC NOK BB, из-за рисков ликвидации.
As a result, retail investors have coordinated their effort to concentrate on decentralised markets for digital currency trading and the inflow of such large amount of retail investors has accelerated the Ethereum growth.
2. Since the 4th of January Ethereum has shown an incredible growth to $1350.The market value reached its maximum on the 5th of February. According to CoinMarketRate data, the current market capitalization of Ethereum is around $190 276 216 697, and the price is about $1663.
The technical analysis demonstrates that ETHhas been moving in an upward trend for the last two days, and it still has a strong upward impulse. From the point of transaction volume, starting from the beginning of 2021 the average transaction volume has been higher than the transaction volumes of both 2020 and 2019. The increase in the volume of transactions is also one of the factors contributing to the continuous growth of crypto asset
3. According to the statistics of ETH options market, the trading volume for the nearest expiration date of call options is much bigger than of put options. So the market is demonstrating positive sentiment. And the main driving power of this sharp increase is capital.
4. Strong growth of DeFi has led to the growth of ETH. In the recent days the DeFi ecosystem has been setting new heights. By this moment, the total blocked value has surpassed $48 billion, and the real value blocked in DeFi has reached $35.55, which is a new record for the industry.
Ethereum is still strongly connected to DeFi markets and remains to be the most often used blockchain for smart-contracts, and, therefore, the price of ETH continues to grow together with DeFi market.
As Debank states, the top-five for largest projects according to the blocked value, includes Maker, WBTC, Uniswap, AAVE и Compound. These five projects have their advantages and the number of those sho are seeking for them is also increasing. Every time when a project gets to the top-five, the price of its token reaches its new height.
5. Institutional arbitrage may increase the recent ETH income supposing that investors buy ETH to solve difficulties associated with loans for ETHE stocks.
Over the recent 3 days, Grayscale Fundhas bought a large number of ETH and its holdings reached the historic maximum.
The total volume of ETH possession reached $3.02 million. 83678 ETH have been bought in the last 7 days. As Grayscale Fund has purchased a huge amount in ETH in the last 24 hours, the total number has reached 12684, and ETH capital inflow has sharply increased.
6. ETH 2.0 positive impact. On the current Ethereum protocol, miners use special equipment for mining, and this equipment consumes a lot of electricity power.
Ethereum 2.0 will enable the asset holder to become the validators of the network, and therefore they will be able to participate in it for getting bonuses for transactions in the form of extra coins.
With Ethereum 2.0, ETH will no longer be a “consumer” good, it will become a “productive” good. Thus, ETH holders will be able to mortgage tokens at interest getting profit from money flows similarly to equity securities.