Further Ethereum (ETH) records - 2 USD within range?

On Thursday, February 4, 2021, the price of the Ethereum cryptocurrency (ETH) hit Binance Stock Market $ 1697,99. This is the highest record in history, but there are many indications that the record will be broken more than once this year. What influences the ever-increasing price of the second largest cryptocurrency in terms of market capitalization?

There has been a lot of talk about Ethereum in recent days, but - traditionally - the gains were noticed by most only when the next ceiling was broken. Meanwhile, last week's price Ethereum (ETH) has increased by 28,73% in the month by 65,61% and the last year is cosmic 762,20% increase. 

Ethereum (ETH) chart, D1 interval. Source: xNUMX XTB.

What is Ethereum?

When analyzing the increases in ETH, it is worth remembering that it is not "only" a cryptocurrency, but a whole blockchain network. Even though the units with 114 on the market alone give a capitalization of USD 528 billion. 

Ethereum is, above all, a decentralized network that has been operating since 2015. You can set up decentralized applications on it, as well as create new tokens. And countless of them are being created, and the Ethereum ecosystem is by far the largest blockchain on the market. Everything is based on an open financial system, and this is the greatest driving force behind recent ETH increases.

Where did the Ethereum increases come from?

In recent months, the sentiment in the cryptocurrency market is undoubtedly positive. Analysts also point out that Ethereum - as during the recent boom on the cryptocurrency market - somehow imitated Bitcoin course. The king of cryptocurrencies reached the new ATH on January 8, 2021. During the previous boom, ETH also improved its price record exactly 27 days later. This time also 27 days passed and the record broke ETH, and now the price continues to rise. 

Experts indicate that this does not have to be the end of the price rally.

- The ETH price peak was influenced not only by the positive sentiment on the cryptocurrency market, but also by the entire Ethereum ecosystem - emphasizes Anthony Sassano, who analyzes the cryptocurrency market.

Ethereum 2.0 makes a difference

The main factor triggering ETH increases is the new version of the platform. The so-called Ethereum 2.0 ignited the imagination even before we knew the approximate date of implementation of the changes. Today it is known that 2.0 million ETH is already blocked in the Ethereum 2,9 deposit contract. That's about $ 4,5 billion, which will be blocked for a minimum of 12 months. Investors receive interest of 9,3% per annum, but - as you can see - they can earn much more from the increase in the price of the cryptocurrency.

But that's not all. Many DeFi projects are based on the Ethereum ecosystem - i.e. businesses and cryptocurrencies in blockchain technology, which are developing at a crazy pace thanks to decentralized finance. It is estimated that 7,4 million ETH was blocked in the DeFi sector, which is another USD 11,5 billion. So it is easy to calculate that 12,5% ​​of the total supply of tokens is deposited, and if we add to this all those who buy cryptocurrencies and wait, even for years, for their large growth, it is clear that there are even fewer of them in real trading.

Shares on blockchain?

Blockchain technology is also rapidly entering the world of traditional finance. More and more often it is used in business. Mark Cuban, the billionaire and owner of the Dallas Mavericks playing in the NBA, talks about it.

- Decentralized assets and tokens may even explode in the next 10 years. While there may be many ups and downs along the way, this is the most likely route. It is very possible that even shares will be blockchain-based in the future, as this will make the markets much more efficient, more transparent and accessible to small investors. - emphasizes Mark Cuban, who himself admits that he invests part of his funds in cryptocurrencies, including small and developing ones.