Ethereum has crossed the $700 benchmark to record highs that have not been seen since 2018.
Market sentiment around the altcoin is bullish, as crypto data provider Coin MarketCap illustrated a jump of over 10% for Ether (ETH), the world’s second-largest cryptocurrency by market capitalization. The spike may come as a surprise to many as Ethereum has been trading below the $600 level around Christmas time.
Ethereum’s surge past a crucial psychological barrier of $700 is perhaps a side effect of the bullish momentum of Bitcoin, which brought altcoins higher as it recorded a new all-time high on Christmas day, sprinting past the $28,000 mark. Currently, the largest cryptocurrency’s market cap stands at over half a trillion dollars for the first time in history, while Ether, ranking second, tops 80 million in market cap. Although Ether (ETH) has surpassed all expectations with its recent gains, it has yet to hit its all-time high again, a milestone achieved in 2017 when the altcoin rose to heights of approximately $1,400 on leading exchanges.
This year has been marked by increased institutional adoption for Bitcoin, a phenomenon that has not been evidenced before 2020. Market analysts are saying that next year may be the year that a similar occurrence happens for Ethereum. Per Ryan Watkins, an analyst at crypto analytics firm Messari:
“2021 prediction: in 2021 we begin seeing institutions buy $ETH. Once you accept that Bitcoin may be valuable, it opens your mind to the possibility that other cryptoassets may also be valuable. It’s a much easier jump from $BTC to $ETH.”
Although Ethereum has not gained as much as Bitcoin this month, it has still been making headway and will likely enter mainstream adoption with Bitcoin. An indication of this is that in the year to come, CME Group is planning on launching ETH futures. According to Watkins, this indicates the increased demand for ETH. He said:
“CME futures is the writing on the wall. They wouldn’t launch an $ETH product if there wasn’t any demand for it.”
Additionally, another indication that Ether will only go up is that it will surely gain even more recognition as a prized crypto asset with its new mainnet, ETH 2.0, in the works. Currently, ETH 2.0 runs parallel to the current blockchain and is a transition to a pure proof-of-stake protocol. Ethereum’s underlying win of 2020 has been the launch of ETH 2.0’s first phase, the beacon chain, which acquired more validators than expected to trigger its debut.
On top of that, Ethereum’s smart contract ecosystem has been leveraged this year more than ever. With most decentralized finance protocols booming in 2020, Ethereum has been the backbone of DeFi, which has made a name for itself in 2020, with over $13 billion in total value locked at the time of writing.
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