Etherum has doubled its price since the beginning of the year and hit a price target of $2000

The world´s second-largest cryptocurrency, Ethereum (ETH), has reached 2000 dollars for the first time today what means a 168% gain since the beginning of the year 2021. Bitcoin has grown 93% in the same period. 

Is there still space for future price growth? We are sure there is but consider the usual crypto volatility. At least three main growing areas of demand are supporting the increase in ether’s price:

  • Decentralized finance (DeFi), 
  • Ethereum 2.0 staking
  • A newly formed institutionally focused market demand on the Chicago Mercantile Exchange (CME). 

Ether handles interactions on the Ethereum blockchain, best known for hosting various DeFi applications such as lending, trading, asset management, and prediction markets. Ethereum-based applications create a natural utility for ether as the cryptocurrency is required to settle transactions. DeFi Pulse Index (DPI) shows up the lockstep of the DeFi coins with ether: up 83% in the last 30 days.

Staking on the Ethereum 2.0 network is also creating a supplied mass of supports for the digital asset. Etherum 2.0 is an incomplete redesign of the Ethereum network. This one is based on a new consensus mechanism called proof-of-stake (PoS) and database sharding. Some 2.7% of ether worth $6 billion, locked for the next 12 months,  have been deposited on the Eth 2.0 blockchain. 

Large investors such as investment funds may be interested in gaining some exposure to the cryptocurrency. CME started cash-settled futures contracts for the digital asset on February the 8th. The contracts overstepped $160 billion in aggregated volume within the first week. Because CME is one of the oldest and most trusted exchanges in the United States., the contract launch may signal growing institutional acceptance for ether.

Jordan Spence (CMO at MyCrypto) said that it is a combination of factors. He claims that „the upwards price movement is a culmination of the entire industry putting in the work these last few years, and more people are catching on and want to get involved.

Spence also pointed out that the price may not be done going up: „ We´ve seen a ton of growth among Etherum and DeFi, and more is on the way with ETH 2.0. “

He also claimed: „Ultimately, the new ETH floor price may be lower than 2,000 dollars but seeing any number around and above isn´t surprising to me anymore.“

Some bullish analysts are predicting the Ethereum can hit $10 000 until the end of 2021.

Source: decrypt.com