Ethereum has recently exceeded its $1,999 price and surged to another all-time high at $2,000 today. Ether, the second-largest cryptocurrency after Bitcoin, is showing remarkable growth from the very beginning of 2021. Data presented by the analysts show that ETH price has increased by 168% till now. While ETH is surging significantly, bitcoin price grew by 93% in the aforementioned time period.
Reasons Behind Ethereum Price Surge
As Ethereum price reached another all-time high, cryptocurrency analysts look into the possible reasons behind the growth. The huge investment by the retail and institutional traders in BTC has recently raised the interest of cryptocurrencies at large. Bitcoin price has reached $56,000 from $32,000 this year. As subsequent results, Ether’s price has almost doubled and non-stablecoin tokens like Compound Dai and ERC20 HEX have been devalued.
Another probable reason is the impact of decentralized finance or DeFi.
Most of the decentralized finance protocols run on the blockchain platform of Ethereum. Recently the popularity of DeFi is increasing significantly.
The applications of DeFi now help investors to exchange assets, accumulate interest, lend money, and check on the current status without any hassle. Websites like DeFi Pulse let users find the latest rankings and analytics of DeFi protocols. It also tracks almost 70 Ethereum blockchain-based DeFi apps. The gross value that is locked into the apps sums up to $42 billion.
According to the CMO of MyCrypto, Jordan Spence, the upsurge of ETH resulted from the increasing involvement of investors in recent times. Spence adds that the price of ETH and DeFi tokens is assumed to increase even more. It is expected that the recent increase will also solve the ETH congestion problems and it will decrease the use of ETH killers as well.
While the rising price of Ethereum is creating a buzz in the cryptocurrency market, Spence states that it will not be surprising if ETH surpasses the $2,000 level quite soon.