The second-largest cryptocurrency, Ethereum (ETH) broke past $3,000 early Monday, May 03, 2021 morning to set a new record as it continues with its bullish rally. ETH is currently trading at around $3,089 and the bullish trend still seems strong.
Compared to Bitcoin, which is the world’s most valued cryptocurrency today, Ethereum is still far off in terms of value but it is the world’s number one when it comes to blockchain use cases. While bitcoin-only acts as a form of payment and storage of value, Ethereum offers developers a platform where they can develop decentralized applications like the decentralized finance (DeFi) protocols to solve several problems facing humankind. And this gives Ethereum leverage over Bitcoin.
What is causing the rise in Ethereum?
- Catching up with Bitcoin
According to the managing director at Q9 Capital, James Quinn, Ethereum bullish rally is a catch-up to the Bitcoin bullish rally that started in late 2020.
- Increased decentralized finance use cases
He also noted that it is an indication that Ethereum blockchain has seen tremendous improvements especially in the area of decentralized finance
“At first, the rally was really led by bitcoin because as a lot of the institutional investors came into the space, that would be their natural first port of call,” Quinn said, “But as the rally has matured over the last six months, you have DeFi and a lot of DeFi is built on Ethereum.”
Also according to the managing partner Kenetic Capital, a Hong Kong blockchain venture capital firm, Jehan Chu,
“Surging DeFi volumes continue to push Ethereum prices higher as investors gain confidence in crypto and see Ethereum as a safe second-place asset.”
- Surge in NFTs
Another factor that can be attributed to the surge in Ether prices is the increasing demand for Ethereum wallets amid the rise in non-fungible tokens (NFTs).
- Launch of ether exchange-traded funds in Canada
There is also the recent approval of ETH exchange-traded funds (EFTs) in Canada.