- Ethereum steals the spotlight of Bitcoin, surges to $2,006.01.
- The recent rally of ETH could be due to the launch of ETH 2.0.
- Ethereum 2.0 promises lower fees and faster-responding speed.
Ethereum steals the spotlight from Bitcoin as it set a new ATH by surging to $2,006.01. Meanwhile, Bitcoin trading has flatlined. It looks like Ethereum could possibly shoot past Bitcoin in the next few months.
Investors have been expecting this for three years now. The year 2020 was the year of DeFi ecosystems, with ETH surging to USD 400 from less than USD 200 per ETH. Other DeFi tokens such as Chainlink, Uniswap, and SushiSwap all surged to new highs.
Consequently, the launch of ETH 2.0 could be the reason behind the price surge. Furthermore, the new blockchain promises cheaper fees and faster-responding speed. Like Bitcoin, ETH is getting more recognition from institutional investors.
The Chicago Mercantile Exchange (CME Group) recently announced its launch of cash-settled Ether Futures in February 2021. Investigators expect this progress will allow more money to flow into ETH.
With broader adoption, ETH could strike more than $2,000 in the coming months. The total open interest for ETH options attained its all-time high of USD 1.8 billion. Genuine interest refers to the total number of outstanding derivative agreements that have not been settled. It measures money’s movement into a futures or options market and signals the market’s trading sentiment.
Traders are hurriedly withdrawing ETH from exchanges. The rate of ETH token deposits on exchanges has decreased to 22% from 26.33% in September. This usually indicates increased holding sentiment among traders.
Besides, Ethereum 2.0 is an upgrade aiming to improve the network’s scalability, programmability, and protection. The Ethereum blockchain will fully embrace proof-of-stake (PoS) to secure its system.
ETH 1.0 currently uses a consent mechanism known as proof of work (PoW). The shift to ETH 2.0 could take up to two years. It will be done in 4 phases.
The final stage of ETH 2.0 is expected to launch in 2021. With the publicity of ETH 2.0, users could use Ethereum in a much cheaper and efficient way while gaining more security. The rise in usage comes with higher demand that could send ETH’s price to new heights.