Important Factors Behind Ether Rally Past 2,000 USD for the First Time in History
February 21, 2021 11:20 PM
Ethereum (ETH) has failed to match Bitcoin (BTC) rise in recent week due to major concern with high network fees. Although that might be changing with increase demand for Ethereum Blockchain.
Ethereum gained a bit on bitcoin a the price of Ether goes past $2,000 for the first time gaining over 15% on the day.
The explosive rally of Ether after it reached $2,043 could be linked to the decreasing amount of ETH and BTC on exchanges just weeks after the launch of hyped ETH CME futures listing.
5 minutes chart ETH/USDT pair on Binance Source: Trading View
Institutional Attention coming to ETH
Ethereum CME futures listing is expected to open ETH to large institutional investors. At the time when the Ethereum CME futures was announced, it came with a negative air as most feared that price of ETH would decrease in a similar fashion to that of bitcoin in 2017 after CME listing.
On Feb, 20. ETH rallied past $2,000 for the first time in it's history. Grayscale's Resuming buying ETH in February indicates institutional hype around ETH.
Bitcoin (BTC) price rally is showing no sign of stopping soon as it drives towards $58,000 with a solid support area at $50,000. Part of the reason for the recent BTC and ETH rally is the the decreasing amount of BTC along with ETH available on exchanges.
Massive Growth in Decentralize Finance (DeFi)
DeFi market has exploded in recent times with total value locked (TVL) moves closer to $50 billion.
The term TVL is used to measure the amount of capital that is involved and locked up in a DeFi protocol.
ETH Fees is needed to operate on any DeFi protocol based on Ethereum network, which positively affects the price of Ether with high TVL in DeFi market means higher value of ETH spent on fees.