Ethereum, the decentralized cryptocurrency and network that aims to be the "world computer," has seen significant growth since the beginning of 2021. It has surged over 500% from January 2021 to date. Beating its previous all-time high of $2,036 in February, Ethereum has soared higher to hit another all-time high of $4,362 in May 2021.
Considering its bullish predictions this year, investors are in a hurry to know why Ethereum will likely hit an all-time high in 2021 again. Let's see if this smart contract leader is all set to embark on a massive bull run. Also, what are the driving factors that support its growth?
Ethereum's Rally Over The Past Few Years
Like other cryptocurrencies, 2020 has been a good year for Ethereum too. Ether, the token of this cryptocurrency, had a high time resistance. It has successfully breached the limit, and since the start of this year, the price has doubled.
It has breached its resistance of $750 in January and today is trading at $2,800 with a 24-hour trading volume of $31,476,267,028.
Ethereum has seen significant pullbacks in the past, like the infamous DAO hack in June 2016. It has lost almost $455 million of Ether into hacker's hands. But the Ethereum community was strong enough to roll back its blockchain and undo the damage.
By building a high hack-proof-peer-to-peer network, Ethereum again started its remarkable journey. It regained its 2nd position in the CoinMarketCap ranking in 2018 and still maintains it with a market cap of $196,146,989,429.
Well, an increase of around 133.754% within a few months, from the beginning of 2021 till date, is a remarkable rally. These increases in its price show that Ethereum will likely hit another all-time high by the end of this year.
Why Ethereum Will Likely Hit An All-Time High In 2021
Ethereum is expected to see strong growth in 2021. One significant reason is its largest developer community. The Ethereum network has an advanced blockchain technology secured with the Ethash proof-of-work algorithm.
The upgraded Ethereum protocol is built on the Proof-Of Stake principle rather than the Proof-Of-Work. It will eventually increase its efficiency, transaction speed and can reduce the transaction rate. Further, the PoS mechanism will lead to more nodes in the network, providing stronger immunity to centralization.
In terms of Ether's supply, as of writing, there are 116,139,272 ETH coins in circulation. Around 3 million ETH is removed from the buyable pool and is locked up for long-term staking. With a lower supply, demand increases, and eventually, the value of this cryptocurrency will grow in time.
Along with DeFi adoptions, the recent launch of Ethereum futures on the CME (Chicago Mercantile Exchange) is also a factor for its surge in value.
Ethereum 2.0 Fuelling ETH's Growth
The popular upgrade, Ethereum 2.0 stake is also a prominent driving fuel in Ethereum's rally towards hitting the next all-time high. The increase in ETH's network scalability to 1,00,000 transactions per second is the initial phase of staking.
Along with increasing scalability, the staking provides ETH users rewards in the form of annualized interest in their holdings. To those users who stake the highest amount of the network cryptocurrency, ETH 2.0 offers the right to earn rewards for each transaction.
The Coinbase annual review for 2020 states that with the increase in Ether's value over the years, more institutional investors see Ether as a relevant store of value. With the growing interest from institutional clients and its DeFi adoptions, investors hope to get substantial returns from investments in Ethereum.
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Ethereum Will Likely Hit An All-Time High In 2021
Ethereum has a vast network that includes decentralized derivatives, a dozen stable coins, lending platforms, digital art marketplaces, etc. As more people use the network, the value of cryptocurrency also increases in the market. With the 2.0 upgrade aiming to enhance scalability and speed, along with the increase in institutional interest, Ethereum will likely hit an all-time high in 2021, further positioning itself as the future facet of blockchain technology.
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