Ether rose almost 12% on Tuesday to reach the new price peak, with indications of a rise that is being projected by analysts earlier this month. Since then, the price of Ethereum has declined and is now traded for around $ 1,250.
Meanwhile, Bitcoin (BTC) suffered a major correction from around $ 40,000 to $ 30,000 last week. Bitcoin’s price has started to move sideways and is currently trading at around $ 34,500.
With Bitcoin settling in a gap now and the wave of interest in 2020 in Decentralized Finance (DeFi), which is mostly hosted on the Ethereum blockchain, Brian Norton, COO of MyEtherWallet (MEW), the leading Ethereum wallet interface, sees this increase as a positive indicator for the future of ETH, despite recent criticisms of high gas prices on the blockchain.
In a note to Blockchain.News, Norton said:
2020 saw the explosion of the DeFi ecosystem in Ethereum – reaching for the first time $ 1 billion in the total amount blocked in February, now $ 20.5 billion in just 11 months. This growth has attracted many new users seeking income that are not available in Bitcoin with centralized intermediaries.
In 2020, Ethereum also began the transition to its Ethereum 2.0 update, which is designed to improve scalability and security and a shift from the proof of work consensus (PoW) algorithm to the bet proof (PoS) algorithm.
Ethereum 2.0 was divided into phases, with Phase 0 enabling the stakeout function of the project. Phase 1 allows for data fragmentation, which would increase scalability and increase network storage resources. Phase 2 allows for thousands of transactions per second, as well as transaction fragmentation.
As the DeFi market continues to attract developers to the Ethereum network – the upgrade to Ethereum 2.0 is expected to help deal with the growing demands on its network.
What I’m looking at is the developer activity on Ethereum, as it serves as an indicator that new and better use cases are coming, which will increase the demand for the native asset. Ethereum has more than 5 times the number of active developers like Bitcoin and is adding developers at a faster rate each day.
In comments emailed to Blockchain. News, Paolo Ardoino, CTO of Bitfinex added:
The price of Ethereum is rising in a resurgent decentralized (Defi) finance space. Although the explosion of projects in Defi has caused growing problems for Ethereum, tier solutions are underway to help scale the network
Bitcoin still optimistic and in good hands
Although the price of Ether fell behind Bitcoin, which had reached new highs almost every week before last week’s correction – Etheruem actually surpassed the largest cryptocurrency in 2021, with a gain of 92%. Meanwhile, the price of BTC has gone up 27% so far this year.
Despite Bitcoin’s continued consolidation around the $ 30,000 range – Ardoino said the Ethereum hike does not mean that Bitcoin ended its own price hike.
Sentiment around Bitcoin remains overwhelmingly optimistic […] Bitcoin is providing a solid foundation for an incredible variety of projects, some of which will fundamentally change the nature of money by the end of the decade. The booming cryptocurrency market must remember that they owe everything to Bitcoin.
The crypto market is alive and well after a three-year bear market and bulls have taken over. As Bitcoin’s price fluctuates, analysts expect $ 30,000 to become the new floor for BTC due to a huge boost from institutional investors.
In addition, Gary Gensler’s recent appointment to chair the United States Securities and Exchange Commission (SEC) and replace Jay Clayton is really exciting for cryptocurrency advocates, as the SEC desperately needs a more refined and balanced approach to regulations cryptography in the USA.
According affirmed by Bitcoin bull and billionaire investor Tim Draper on Gensler’s appointment:
Congratulations to Gary Gensler for his appointment to become head of the SEC. #Bitcoin is in good hands.
Along with his extensive experience in regulating financial markets, Gensler also has a long history in public policy and finance. Gensler is a senior advisor to the MIT Digital Currency Initiative and gives lectures on blockchain technology at MIT Sloan.