Ethereum, the world’s second-largest cryptocurrency, is creating a storm in the cryptocurrency space, outperforming all of its peers. The magnitude of its rally is that Ethereum price reached its highest level of $2,772 on 29th April 2021. In fact, June could be Ethereum’s best month yet.
This isn’t the first time ETH has crossed the $2000 mark, though; it had briefly flirted with the $2000 price point during an intraday trading session on February 20th, 2021. However, it couldn’t hold the price and quickly fell back to under $2000. This time, it’s different, with ETH surging past the $2000 mark and setting its all-time high price point.
The reason behind the rally? The backing from Visa Inc. seems to have brought the bulls to the party.
What Is Driving This Latest Rally?
The reason behind ETH’s stunning price rise? Visa and its endorsement of Ethereum is the main driving force behind this particular rally.
In a hugely significant announcement, Visa said that its payment network would support and utilize the USD Coin, which is a stablecoin backed by the US Dollar to settle transactions on its network. This is another sign pointing towards the adoption of blockchain technology and cryptocurrencies in the mainstream financial system. This has dramatically boosted investor sentiment when it comes to Ethereum.
Mark Cuban’s Words of Endorsement
What happens when a billionaire investor gives a cryptocurrency, in this case, ETH, a vote of approval? Well, everyone wants to jump in and get a piece of the action, driving the price of the currency even higher.
This is exactly what happened when Mark Cuban recently stated that he owns a lot of ETH and thinks that ETH is the closest to a true currency than any other cryptocurrency. According to Cuban, bitcoin is a better store of value, but Ethereum is the currency with better utility.
Cuban believes that the game-changer for ETH is smart contracts and the creation of DeFi and NFTs, and these developments completely changed the game for ETH.
Dollar’s Share Of Reserves Falling Fast
It has also been noticed that the Dollar’s share when it comes to global reserve is quickly falling, with countries like Russia opting for gold as a reserve instead of the Dollar. The demand for the Dollar increased when the Covid-19 pandemic was declared. However, since then, the currency has struggled to outperform other fiat currencies.
If the decline continues, then there could be a chance that cryptocurrencies like Bitcoin and Ethereum could rally as investors try to hedge against inflation or invest in them as a store of value.
Other Factors At Play
The factors discussed above are significant drivers when it comes to the price of Ethereum, making it probably the best cryptocurrency to buy in June. However, those are not the only factors that are at play when it comes to the price of ETH. The two other factors that are having a telling impact on ETH are Decentralized Finance (DeFi) and Ethereum 2.0.
ETH has built its reputation as a stable crypto. However, Ethereum has expanded on its use cases and is clearly more than just a cryptocurrency.
DeFi refers to the application of finance and financial products in the blockchain and cryptocurrency space. DeFi has been a game-changer for Ethereum. As of January 2021, there is almost $25 billion that is locked in DeFi smart contracts. This is up from less than $1 billion a year ago.
Ethereum has become the go-to platform when it comes to DeFi projects, with most companies setting up their DeFi projects on the Ethereum blockchain. The Ethereum blockchain’s use for DeFi has created a huge demand for ETH, the blockchain’s native cryptocurrency.
Ethereum has established itself as the blockchain protocol at the center of the new financial economy. Other blockchains are also building their own DeFi products, but they are doing so much slower than Ethereum.
Ethereum is pretty much synonymous with DeFi, powering a host of cryptocurrencies in the DeFi sector. As DeFi becomes more popular and more companies build their DeFi projects on Ethereum, the price of ETH is expected to skyrocket.
Don't Miss: Ethereum Price Prediction
Ethereum 2.0 is the long-awaited upgrade to the Ethereum blockchain. The upgrade promises more speed and efficiency for transactions on the Ethereum network. It also addresses scalability, a problem that had plagued Ethereum as the number of users increased, thanks to Ethereum’s growing popularity. Ethereum 2.0 helped the platform address numerous bottlenecks on the network caused by slow transaction speeds.
How will Ethereum 2.0 address the issues of speed, efficiency, and scalability? Ethereum 2.0 will see Ethereum switch from a Proof-of-Work consensus mechanism to a Proof-of-Stake consensus mechanism. This switch will enable Ethereum to address its scalability issues, allowing the platform to process more transactions more efficiently.
Many analysts and cryptocurrency enthusiasts predict that Ethereum 2.0 will significantly impact the price of Ethereum. Once the switch to Ethereum 2.0 is completed, the platform will be able to process 100,000 transactions per second.
Analysts predict that it will have a bullish effect on the price of Ethereum, both in the short-term and the long term.
If you look at the factors stated above, June could be Ethereum’s best month yet, with the cryptocurrency having broken past the $2700 mark and set a new record price in the process.
Some analysts predict that Ethereum’s price will continue to rise, with both short-term factors and long-term factors influencing the price of Ethereum and push it past the $2700 mark as bullish investors continue to pour in money into ETH.
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