Late Chrismas Gift for Ethereum?
Ethereum had a bullish start for the day as it broke above $700 for the first time since the last week of May 2018. The largest altcoin was seen lacking bullish momentum as its price movement broke away from that of Bitcoin. However, Ethereum soon climbed to $735.93, at the time of writing after multiple pullbacks close to the coveted level.
According to the crypto-analytic platform, Glassnode, the latest surge triggered 90% of all Ethereum addresses [which roughly amassed for 47 million addresses] holding ETH are now in a state of profit. The last time this number was witnessed to be this high was back in January 2018.
The infamous Black Thursday crash is worth noting in this context because Ethereum has come a long way since then. In March of this year, only 3.2% of all ETH addresses were in profit as opposed to 90% following the spectacular price rise right after Christmas.
Here’s what Messari’s Ryan Watkins has to say about the latest uptrend:
“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 from there.”
While Bitcoin continued to be the darling of institutional investors and corporations, Ethereum was not far behind either. Amassing a market cap of $83 billion, Ether’s success story among institutional investors can be attributed to strong fundamentals. Especially, the decentralized finance [DeFi] sector happened to be one of the hottest and the most exciting thing in the cryptocurrency industry this year.
This helped the second-largest network to hold on to the leadership status as the enormous majority of DeFi projects were based on the Ethereum blockchain. In addition, the growing network activity, in turn, led to increased ETH transaction fees and strong demand for the underlying token.
The growing conviction around Ethereum as an asset class was witnessed this year. This was further evidenced by the Chicago Mercantile Exchange’s [CME] announcement of an upcoming launch of a futures contract on Ether in February 2021. This development was touted as a game-changer for the ETH ecosystem.
To top that, the Grayscale Ethereum Trust [ETHE] registered over $1.7 billion in assets under management [AUM]. It was also found that the shares of ETHE [OTCMKTS: ETHE] had surged by 700% YTD. This has also intensified the bullish outlook as many market participants now believe that once the Bitcoin rally subsides, there will be a capital inflow into altcoins with ETH being the first choice of high-profile investors.