During the half of 2020, we tend to see a growing interest in cryptocurrencies from institutional investors and enormous capital. However, all the attention of the whales, conjointly as all the attention of the final public, was mounted on Bitcoin (BTC). Today, we’ll inspect why Ether (ETH) could also be an additional enticing quality and why this cryptocurrency ought to become the “first cryptocurrency” for every capitalist.
Let’s begin with the numbers: ETH’s growth since its March 2020 low once the coronavirus-induced market crash has been 1,200%, whereas BTC has solely been around 700%. Of course, against the scene of record highs for Bitcoin, whose value reached $ 40,000, the rise of Ether to $1,400 does not appear thus spectacular. Moreover, the capitalization of ETH is 5 times however the amount of the BTC market. However, what is additionally vital for AN investor: nice numbers and records of quality from a portfolio of high income?
There are robust reasons to believe that Ether can still rise in value in 2021 and convey additional profit to investors than the “most known cryptocurrency,” Bitcoin.
Demand among developers
Ethereum is the number-one platform for building a blockchain and launching redistributed applications. The chart below displays the number of distinctive ERC-20 tokens listed throughout the first years since the launch of the Ethereum network. And despite the actual fact that the speed of enlargement of the marketplace for blockchain startups has delayed since the initial coin-providing bubble burst in 2018, their total range remains growing.
And even despite the actual fact that Ethereum has serious competitors — like Tron, Polkadot, Cardano, Cosmos, and Tezos — Vitalik Buterin’s cryptocurrency platform continues to be a pacesetter throughout this direction.
Growing transaction volume
During 2020, quite $1 trillion value of transactions were recorded on the Ethereum blockchain. These figures exceed the dealings volume of payments giants like PayPal, which is utilized by over 350 million users and has average volumes that do not typically exceed $200 billion per quarter.
Also, confine in mind that each dealings generates network fees paid in ETH. And since the network’s growth rates area unit is still high, we’ll with confidence expect the continuation of the “bullish” trend of ETH. In any case, interest in cryptocurrency is increasing, as is the number of active wallets, the amount of transactions on the network, and thus the typical dealings size.
Development of the DeFi sector
Despite Bitcoin’s leadership at intervals in the cryptocurrency market, Ethereum remains the leader of the young redistributed finance trade. Extremely fashionable at intervals of summer 2020, DeFi disposal and staking still grows, attracting new investments.
The total price secured in redistributed finance since the beginning of 2020 has increased nearly 3,300%, from $687 million to $23.2 billion. And Ethereum is the platform for the creation and launch of most new DeFi projects and stablecoins.
The emission of stablecoins is systematically growing, as digital assets backed by the price of less-volatile act currencies area unit an extremely convenient tool for fast settlements between users, for forming trading pairs on crypto exchanges, and for saving capital from high volatility in your cryptocurrency wallet.
Separately, we should always mention the interest of institutional investors in redistributed finance. Whereas the chaos at intervals of the DeFi market nearly scoured institutional confidence at intervals of the potential of blockchain at intervals of summer 2020, public corporations still show interest within the new quality kind.
In August 2020, Archax and Algorand unconcealed plans to develop tools for introducing DeFi among organizations. And at intervals in the autumn of 2020, it became popular that xSigma, a subsidiary of the Nasdaq-traded ZK International, is engaged in the event of DeFi services and is getting ready to launch a redistributed exchange for trading stablecoins.
We all keep in mind what massive investors’ attention to Bitcoin diode to last year, right? Now, it’s like different area units of the cryptocurrency trade are bound the same, and many of the area units are directly related to Ethereum. Thus the most advantage of Ethereum lies at intervals of the flexibility of its technology and its growing community.