From the very beginning of 2021, we have been witnessing a sharp rise in the rate of the world’s second largest cryptocurrency – Ethereum. What has been driving the rise? How can we possibly explain it?
Some experts claim that the rise began with the January news on the Ethereum collaboration with Reddit. It has marked the new boost after successful finish line of 2020. The new partnership raised hopes up high and increased the value of Ethereum dramatically. The main goal of the Social media giant was to build out scaling tools for the blockchain network and increase their own presence in the Ethereum ecosystem.
Just after that, throughout January, Ethereum rate grew by record 78,43%, and kept growing ever since.
In February, it did not show significant results, only rising by 8% throughout the whole month. However, it doesn’t mean that February was not holding many events significant for the Ethereum blockchain. Thus, in February, the CME exchange launched long-anticipated futures contracts for Ethereum. These contracts boosted the cryptocurrency rate and made it grow unprecedentedly high.
Another huge boost from February is the gradual change to Ethereum 2.0, the new version of the blockchain platform. The change is about moving from Proof-of-Work to Proof-of-Stake mode of work, when the blockchain is supported not by miners, but by the users who hold the coins and provide the computing capacity. This mode of work is called staking, and it is very promising for the Ethereum network as a new way of managing the whole network.
After such successful month, in March, the rate grew by 35,26%, while in April the rate sky-rocketed by 44,50%, leaving all Ethereum holders with huge profits.
Not only holders were the ones who benefited from the recent changes about the Ethereum blockchain. Another group highly affected by this situation are Ethereum miners. Their income has also grown, especially over April, by record 19%, and reached 1,65 billion USD. It is mainly explained with lower transaction commission: it had lowered to the January levels, while the price per Ethereum coin has almost doubled since January.
Another boost in the price of Ethereum coin lies in their constant hardforks. A hardfork is an event when the whole body of a certain blockchain, be it Ethereum or Bitcoin or some other network, is changed and there are new rules implemented into the blockchain. Sometimes it means that the blockchain is divided into two independent networks, sometimes it only means important changes.
Ethereum, on its part, recently held another hardfork called Berlin, which implemented new ways of figuring out the gas amount for transactions, as well as new types of transactions.
Ethereum blockchain is a crucial platform for decentralied finance (DeFi), the sphere of blockchain-based form of finances that are going to outlive the traditional banking or centralised exchanges, replacing them with applications with open source code. This is a growing system that includes contracts within Ethereum blockchain. Only half a year ago, in October 2020, there were over 11 billion USD worth funds in cryptocurrency employed in DeFi structures and applications.
Moreover, the S&P Dow Jones Indices are now reporting that they are going to implement Bitcoin, Ethereum and a number of other cryptocurrencies as a part of its own bucket. The rate is calculated not in USD, but in points, and the legendary index provides different tickers for different cryptocurrencies.
At the moment when this article is being written, the price of the world’s second largest cryptocurrency is reaching the record high 3400 per Ethereum, and it is not going to dive down! Many experts claim that this year we may see the prices go as high as 10’000 USD per Ethereum. Is this statement possible, or is it another bold assumption? Let’s find out later!