Ethereum (ETH) was invented by Vitalik Buterin and is a large blockchain for smart contracts, dapps and even token creations. The picture shows a metal coin of Ethereum in front of a price curve.
The Ethereum price is on the heels of Bitcoin’s record-breaking upward movement in recent weeks. The largest altcoin, with a market cap of $ 115 billion, is up nearly 50% in the past week, breaking the magical $ 1,000 mark.
The Ethereum course is currently showing its strong side. The last time this price level was reached was in February 2018. At that time, the Ethereum price reached its previous all-time high of almost USD 1,450.
Ethereum is facing a big change
Due to the strong volatility of the Bitcoin price, the Ethereum price is currently fluctuating around USD 1,000. Since the sharp drop in March 2020, the ETH price has risen by more than 900% and has therefore outperformed BTC.
At this point, it should not be forgotten that the risk with Ethereum is much higher than with Bitcoin. This is not only due to the high dependency on BTC, but also to the update to Ethereum 2.0, which should be completed in the next few years.
In doing so, ETH will switch from the Proof-of-Work (PoW) to the Proof-of-Stake (PoS) consensus algorithm. The danger does not only exist with the change itself, but also with the greater uncertainty caused by PoS. Nobody currently knows whether the security around Ethereum and the values that are stored in the various smart contracts will be sufficient.
DeFi TVL at ETH continues to increase massively
Almost 18 billion USD are currently deposited in the various DeFi applications on ETH. This is also one of the possible reasons why the Ethereum price has soared.
If this value continues to rise, the Ethereum price should also follow suit. At least there has been a strong correlation in the past.
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Ethereum with a lot of potential
In addition, ETH is to become deflationary through a new EIP (Ethereum Improvement Proposal). With the EIP 1559 , part of the transaction fees will be destroyed forever and thus the number of ETHs will be reduced in the long term.
Still, Ethereum doesn’t have a maximum number like Bitcoin. It is therefore still unclear how the number of ETHs in circulation will develop in the future. The inflation rate could change in the future. Therefore, Ethereum is not a store of value and has different properties than Bitcoin.
Whether the Ethereum price will reach its old all-time high again and perhaps march towards USD 2,000 or even USD 3,000 cannot currently be foreseen. However, with the increasing interest in DeFi, Ethereum should also get attention.
In addition, many new investors are currently entering the cryptospace and are often oriented towards Coinmarketcap and Co. Therefore, it is to be expected that a lot of fresh money will flow into ETH. We are curious how the Ethereum course will perform in the next weeks and months and will keep you up to date.Categories: Bitcoin