Ethereum hits all-time high, surging past $3,000
When it comes to cryptocurrencies, bitcoin has all the brand name recognition, but as far as year-to-date gains are concerned there’s been a much better cryptocurrency to invest in in 2021 (so far). That cryptocurrency is Ethereum (also known as Ether, or just its ticker symbol ETH for short).
Ether hit an all-time high of over $3,100 on Monday morning. Yes, that’s well below bitcoin’s current price of around $58,000. However, when looking at the two coins from a YTD return perspective, bitcoin is only up 95% while Ether has surged 325% since its January 1, 2021 price of $730 per coin. So why is Ether surging? Reuters reports that it’s down to four factors:
- The 2020 bitcoin gain: bitcoin surged in 2020 from a March low of around $4,800 to a December high of around $30,000. With that kind of growth, bitcoin naturally has spurred institutional investors into looking at other cryptocurrencies that might have the same type of return. Cryptocurrencies like Ether.
- A shift towards DeFi: “DeFi” stands for decentralized finance. Instead of traditional banks (centralized finance) DeFi is a model that cuts out the traditional middle-man (aka the banks) and allows for multiple entities (thus the “decentralized” bit) to hold the records of the transactions. As DeFi becomes more popular, Ether stands to benefit greatly because most DeFi applications are built on top of the Ethereum platform.
- Oh, Canada: earlier this year, Canada approved three Ether exchange-traded funds (ETFs), lending credibility to the digital coin. With credibility comes investment.
- NFTs: Non-fungible tokens, or NFTs, have been all the rage in 2021. These are the digital constructs that allow a piece of digital art to be sold as an original instead of an easily duplicated copy. Most NFTs are part of the Ethereum blockchain, which further lends credibility to and interest in the bitcoin competitor.