While Bitcoin has seen a stagnant currency trend over the past week and only recorded marginal gains of only 3%, its crypto neighbor Ether (ETH) seems to play a role not only against the US dollar. but also consistently hovering around the $ 1,300 thresholdand now finally briefly the all-time high of 1,428 US dollars.
It is interesting to note that unlike Bitcoin (BTC), Polkadots DOT and Chainlinks LINK, as well as a host of other decent sized altcoins, ETH is one of the few premium digital assets that has not performed the best in the world The course of this current bull cycle held above its ATH. According to some people, the outlook for the currency’s macro trend It seems “ridiculously bullish,” and if the coin is able to close above its previous ATH value, it is set to quickly soar to around $ 2,800-3,200.
At the end of 2020, the value of ETH was in the range of 500 to 650 US dollars, after which it rose by around 100% within a few days. The ETH has been trading at around USD 1,200 for some time. If this “bullish” trend continues and the market is not exposed to serious negative reactions, Expect the currency to rise again in a bullish way and range between $ 2,000 and $ 3,000.
Another reason Ether could rise in the near future could be the fact that cryptocurrency reserves have declined on all centralized exchanges, suggesting that the demand for altcoin is increasing. Data available online shows that ETH foreign exchange reserves fell by a whopping 20% from 10 million to 8 million between January 14 and 15. Not only that, according to Glassnode, The ether reserves on centralized exchanges are currently so low that they have not been seen since July 2018.
Why is Ether Leaving Centralized Trading Platforms?
To better understand why Ethers are leaving the exchange so quickly, Justin Barlow, research analyst at digital asset data provider The Tie, pointed out to Cointelegraph that the ongoing token exit could mean Ethers are beginning themselves in “stronger hands.” ” to moveThis means that players who may not be trying to sell their reserves for instant liquidity will add:
“This includes funds, token development teams and retail investors. While this is not a clear indicator, we will likely continue this trend when more regulated ways to buy ETH are introduced, such as the Grayscale ETH Trust or the 3iQ ETH with multi-month funds Embargo periods. “
Nikita Ovchinnik, director of business development at Decentralized Aggregator and Exchange 1inch, believes there are several reasons that can explain this change and that this trend is very likely to continue in the future.. Ovchinnik stated that more and more cryptocurrency investors are realizing that there is no need to hold Ethers on wallets in order to sell them as there are a number of DEXs that offer extremely competitive rates.
In addition, the incentives offered by DEX far exceed the incentives currently offered by central exchanges. For example, Keeping Ether in DEX logs allows investors to participate in yield farming, governance, staking, and all other powerful ways that users can generate significant streams of passive income.
Additionally, it’s no secret that holding tokens on centralized exchanges has always been a risky endeavor, as even the best trading platforms can suffer hacks and data breaches. On this subject Ovchinnik also said that “DeFi has taken a big step forward from a design point of view and is extremely easy to use at this point. This is another reason why institutional investors have become more active in this area.“.
Is the impending ether boom real?
While Bitcoin is still clearly the darling of the cryptocurrency industry, its price seems to be largely driven by the “tight supply and elastic demand” model. As a result, the currency is becoming a long-term store of value like gold rather than an ecosystem for technological innovation.
Ethereum, on the other hand, is very different due to its advanced programming-related features like smart contracts and therefore appears to act as the Swiss Army Knife of the crypto ecosystem. On the subject, Sandeep Nailwal, Operations Manager at Matic Network – a blockchain technology-based scalability platform – told Cointelegraph:
“Ethereum has clearly established itself as THE decentralized execution platform for running Web3’s business logic, be it in decentralized finance or the platform of choice for games and collectibles, also known as NFTs. The huge DeFi wave of 2020 shows this clearly be 21st century Wall Street, and the platform for enforcing those business rules is Ethereum. “
He added that a number of critics continue to insist on high gas rates, but people continue to use the network despite the current challenges. Nailwal added: “Ethereum powered apps are so valuable that their users pay hundreds of dollars in gas fees“.
Ovchinnik added that Ethereum could potentially become the Wall Street of the cryptocurrency finance sector. It offers a wide range of investment opportunities to various market participants, from arbitrators to long-term investors.
While the demand for most crypto assets is currently driven by market speculation, Ethereum appears to be one of the few projects where there is real demand for the token itself. The simplest example is gas fees, where users leverage ETH by paying around $ 7 million in gas fees alone. In addition, ETH Pairs are the most widely used in all DEXs, while Altcoin is also the primary asset used for most DeFi-based credit and lending activities.
Finally, the use of Ethereum 2.0 has also proven very popular, as evidenced by the fact that almost $ 3.75 billion has been tied up in the Beacon Chain since it was launched last December.. By taking advantage of this equity option, which requires individuals to invest at least 32 ETH in the currency’s ecosystem, investors can receive rewards in the form of annualized interest on their holdings.
A bright future for ethers?
Earlier this month, when ether was still below the $ 1,000 mark, Tyler Winklevoss, co-founder of the Gemini exchange, was explained this ether is by far One of the “cheapest” cryptocurrencies on the market today. Investors currently hoarding the digital currency are getting robbed for their money.
Barlow is of the opinion that while Tyler and Cameron Winklevoss have high hopes for ETH in the short term, it is still difficult to project ETH price actions with a high degree of certainty in the short term. Barlow added that despite a lack of a cap like Bitcoin’s 21 million cap in 2021, ETH is likely to continue to be in high demand.
According to Barlow, the growth trend is likely to accelerate further as the demand for decentralized applications on the blockchain continues to grow and the crypto market as a whole sees an increase in institutional influx: “As the second largest crypto currency by market capitalization, ETH naturally sees new demand when the institutes look beyond an overcrowded Bitcoin trade.”.