Ethereum hasn’t been in the headlines much since the hype around DeFi started slackening but that doesn’t mean it’s crashing
All talk in the crypto space this week has been focused on Bitcoin. The cryptocurrency has managed to make strong gains following news about PayPal now supporting it, which has boosted this upward momentum, driving Bitcoin to crack the $13,000 mark. Bitcoin prices rose even further and registered a new 2020 high after hitting $13,200.
Meanwhile, Ethereum has only caught a brief wave of hype, although industry experts believe it could grow even more. With the launch of Ethereum 2.0 being closer by the day, we could likely see ETH price rise to a new high.
Ethereum has only gained slightly over 4% after starting the week at $380. Yesterday, ETH managed to reach $400 but couldn’t stay the course and instead slumped. On an extended scale, however, Ethereum has done much better, and outperformed Bitcoin by a factor of two.
This performance will likely continue for the next few months as the fundamental, on-chain and technical indicators strengthen. There is also another boost based on the current prices of both cryptocurrencies. Ethereum is trading at about 70% below its all-time high compared to Bitcoin, which is only 35% shy of its peak.
According to its founder Vitalik Buterin, Ethereum is more than a hedge against failing fiat and can only be well described as a complete financial ecosystem. He believes that ETH should no longer be viewed as an altcoin because it has developed and seen a lot of overall growth over the past five years.
A staggering 9 million ETH is locked in decentralised finance as of writing. This translates to 8% of its maximum supply and depicts an upturn of more than 200% since the year started. A large percentage of Bitcoin is held in cold storage whereas ETH is being invested to earn more ETH and rewards in other crypto assets. A number of institutional investment funds like Grayscale have lately jumped in on ETH because it is viewed as undervalued.
DeFi has arguably been the biggest catalyst of ETH prices this year. Its impact has been significant, albeit not as much as that of Initial Coin Offerings to ETH prices three years ago. The next potential major driver of ETH prices will be the launch of Ethereum 2.0.