Ethereum has now broken $2K to hit an all-time high. In 2021 alone, Ethereum price has gained more than 100%. The period of anticipating the $2,000 mark is now over, as Ether has broken past that resistance. Ethereum, the 2nd most capitalized crypto, has now surpassed watchers’ expectations as it has broken through its resistance long ago and heading higher.
Yesterday marked the first time the digital asset would be breaking through $2K, rising by about 170% since early January. Meanwhile, Bitcoin, the cryptocurrency with the highest market cap and the benchmark for other cryptocurrencies, has risen by 94% in the same period.
Analysts Urge Investors to Buy Bitcoin
Two factors that have contributed to the growth of Ethereum are explained below. The ongoing endorsements of Bitcoin by both individual and institutional investors have not only attracted people to Bitcoin, but they have also boosted the popularity of other cryptocurrencies. In early January, Bitcoin was steady at $32K but is now $56K and still keeps rising.
All major tokens have risen in value since January. Even new tokens, such as Compound Dai, have been soaring since their launch. In addition to the above reasons, Decentralized Finance, an Ethereum-based blockchain, is becoming increasingly popular. Ethereum had long been searching for a fantastic application until it discovered the DeFi app, enabling users to lend funds, get interest, and exchange assets bypassing financial institutions.
A report by DeFi pulse shows that the total funds presently in DeFi applications are over $41 billion. Ethereum reaching $2K is a great testimony that the platform is truly scalable, and its DeFi applications are growing at a fast pace. Hence, the Ethereum platform is establishing itself as the real benchmark of the DeFi. Now, the digital asset is reaching an institutional level.
An analyst, Jordan Spence, attributed Ether’s continuous bullish movement to the crypto market’s general growth, resulting from the collective action by crypto investors to see the industry reach a greater height.
Burning of ETH Every Year for Upgrade Could Pump the Price
Grayscale, the popular intelligence firm, has noted that the yearly planned upgrade of Ethereum will add to the factors that will pump Ether price. This shows that the bullish momentum still has huge prospects of rising, judging from Ethereum and DeFi fundamentals. Ethereum 2.0, an alternative to the present network, was launched in 2020.
However, it has not been functioning yet. Stakeholders are still optimistic that it will serve as a working solution to the congested Ethereum platform, enhancing scalability and ensuring the easy flow of transactions and avoiding the dependency of ethereum users on another network for scalability. In early February, Ethereum broke through $1500, hitting a new high, rising by over 1600% in a year from $100 in early 2020. Since then, watchers had been eyeing Ethereum’s next move.
Analysts also attribute the rise of Ether’s price to more funds entering the major cryptocurrencies that have now been regarded as better alternatives to gold as an inflation hedge and fiat currencies as a store of value. Also, Ethereum 2.0 is expected to do away with mining which is not environmentally friendly. Note that many cryptocurrencies, including Bitcoin, depend on mining to power their blockchains. Ethereum is planning to solve the problem.