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Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, has marked been seeing its price steadily move up since April 27 making a new high of $4,100 (on Bexplus) on May 10.
At the beginning of 2021, ether’s price broke $2,000. Now, little after a little over 3 months, ether has exceeded the coveted $3,000 mark. Its market cap expanded as well to over $475 billion. As the time of writing, Ethereum has surpassed business giants like PayPal, Procter & Gamble, Netflix, and more.
The European Investment Bank launching a “digital bond” sale (€100 million) using the Ethereum network is said to be one of the main reasons for the Ethereum’s new record. Increasing interest in decentralized finance has reportedly also increased demand for ether.
It is worth noting that Ether is becoming more popular among both retail and institutional investors, especially over the last few weeks. Grayscale, the world’s largest cryptocurrency investment management company, has more than 3.2 million ETH, accounting for about 3% of the total supply. This greatly reduces the total supply of Ethereum in circulation, which means there’s less supply out there to meet demand.
Moreover, Visa announced that it will settle transactions on Ethereum with cryptocurrency partners, and the current insufficient supply of ETH on exchanges has also played a role in its rising price, as the amount of ETH on exchanges recently hit a 28-month low.
Although Bitcoin is still the number one cryptocurrency, ether’s price rise has seen speculators predict a “flippening,” in which ETH surpasses BTC’s market cap, could happen in the near future.
Institutional investor demand is rising at a time in which Ethereum Improvement Proposal (EIP) 1559 is soon set to be launched on the network. EIP-1559 is expected to help ether become a deflationary currency while significantly reducing gas fees on the network.
Since its upcoming implementation was confirmed, the price of the cryptocurrency rose by about 105%. If the trend continues, Ethereum’s price could keep on rising, although it has multiple challenges ahead if it’s ever to reach $30,000.
It is an upgrade to Ethereum’s network that allows investors to stake Ethereum for interest thanks to its move to a Proof-of-Stake consensus algorithm. The network is still in development, but there has already been over $1 billion of ETH locked in its staking contract, which decreases supply.
It will affect the cryptocurrency market. When bitcoin’s price ticks down, most altcoins follow suit. Ethereum has been outperforming BTC significantly during this altseason, but it has a long way to go to get to BTC’s doorstep.
High transaction volumes
High transaction volumes have clogged the Ethereum network, leading to rising transaction fees. These fees are paid to miners who often sell their tokens on the market to keep their operations running.EIP-1559 could see some of the ETH paid get burned, further reducing supply.
If you don’t hold ETH but still want to catch up with this bullrun, you may try to trade ETH at crypto exchanges. Bexplus is a leverage trading platform that doesn’t any KYC- registration is done through Email verification. Transaction fees on it fees are lower than on most other exchanges.
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