Ethereum price jumps over $ 1,500 for the first time – that’s behind it
No time right now?
The second largest cryptocurrency behind Bitcoin, Ethereum, has hit a new all-time high and is now worth over $ 1,500. The reasons for the Ethereum price rally are diverse.
After Ethereum had reached the psychologically important mark of $ 1,500 for the first time in its history on Tuesday, it continued to rise on Wednesday – initially to $ 1,567. Within the past 24 hours there has been an increase of almost eight percent. However, the Ethereum rate has more than doubled since the beginning of the year.
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Ethereum price rises faster than Bitcoin price
There are several reasons for the ongoing price rally. On the one hand, Bitcoin is currently in a consolidation phase after weeks of chasing records. Often – and even now – the hour strikes for Ethereum as by far the second largest cryptocurrency. Another obvious reason: A unit of the cryptocurrency is significantly cheaper than a Bitcoin – especially for beginners this is an encouragement to access it earlier.
In addition, an analysis by Glassnode shows that the number of small and institutional investors in Ethereum has risen continuously in recent weeks – apart from a few setbacks, such as BTC echo writes. The number of Ethereum wallets that hold either 0.1 or more ether or 10,000 or more ether was considered. The number of wallets from small investors has climbed from around 3.6 million to just under 3.9 million since the beginning of November; that of major investors from 1,030 to 1,100.
Crypto exchanges: demand increases, supply decreases
With the increasing demand, the supply on the crypto exchanges is becoming scarcer. The amount of ether held by exchanges fell within six months by 19 percent to 15.4 million. At the same time, the percentage of Ethereum units bound in so-called smart contracts rose from around 13 to just under 17 percent.
According to Coinmarketcap, the number of ethers in circulation is currently 114.5 million. The market capitalization is around $ 176 billion. This means that Ethereum is still a long way from the total value of the Bitcoins mined so far – 667 billion dollars – but the market capitalization of Ethereum is roughly as high as that of the next 35 largest crypto assets combined Trending topics calculated Has.
Transition to Ethereum 2.0 is driving the course
Another important driver of the current Ethereum development is the realignment of the crypto network from proof-of-work (mining) to proof-of-stake. In the long term, the changes are intended to increase the transaction capacity from the current 15 transactions per second to several thousand transactions per second. The Ethereum community had overcome the first hurdle on the way in November. Ethereum is now the third largest staking network after Polkadot and Cardano.
In addition, unlike Bitcoin, investors currently seem to see room for improvement in Altcoins such as Ethereum until the prices have doubled compared to the last record phase in 2017/18. Bitcoin had already achieved this doubling. Recently, speculation had also driven the Ethereum price, which resulted in the cryptocurrency not being classified as a security by the US stock exchange regulator – unlike Ripple / XRP. This would mean that Ethereum / Ether would escape the threat of stronger regulation.
