The price of Ethereum has risen recently and has risen to its highest level since early September as the supply of this digital currency is depleted.
Digital currencies that act as native assets of the Ethereum platform reached $ 3,823.19 around 12:15 EST, CoinDesk data show.
At this point, cryptocurrencies were up about 12% from the daytime low of $ 3,412.38, which was reached yesterday, additional CoinDesk figures reveal.
In addition, ether has been trading at the highest price since September 7.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
When explaining these latest price fluctuations, some analysts talked about market dynamics.
Jesse Proudman, Co-Founder and CEO of Cryptrovo, said: -Advisor Makara.
“Overall, the DeFi sector has locked 7.5 million ETH (~ $ 94 billion) in various protocols, which, coupled with the burning of over 529,000 ETH, has increased ETH supply from the liquid market. That should put upward pressure on prices, “he said.
“We expect the market to hit a record high by the end of the year,” Proudman added.
Sean Rooney, Head of Research at Valkyrie Investments, also participated.
“The explosive growth of DeFi since the summer of 2020 has attracted old and new investors to Ethereum,” he said.
“Sometimes DeFi transactions make up 35-40% of the total crypto transaction volume,” says Rooney.
“This, combined with Ethereum trapped in preparation for ETH 2.0, has resulted in the lowest supply of ETH available on traditional exchanges in more than three years, less than 13% of total supply. rice field.”
Gary Pike, director of sales and trading for crypto services company B2C2, chimed and provided additional information on market dynamics.
“There are two main reasons why ETH is recovering,” he said.
“First, macroinflation continues to be a constant driving force in yesterday’s consumer price index, which as a whole continues to exert constant upward pressure on the entire crypto complex, increasing the value of ETH. ”
“But with the implementation of EIP-1559 (aka London Hardfolk), ETH now has a way to spend more on this inflation story to limit supply,” said Pike.
He also talked about the steady transition of the Ethereum network from proof of work to proof of stake, a development called “merging.”
“There are many suggestions for a complete migration of all PoW mining to a PoS staking validator known as a’merge’,” said Pike.
“Ethereum will continue to be the leading blockchain for real-world business applications: decentralized finance or DeFi, and digital art through non-fungible tokens or NFTs,” he continued.
“Ethereum blockchain is actually being used more and more often, so it makes sense for investors to want to own part of the protocol via the native token ETH. These two business use cases , Gas charges will be significantly reduced and blockchain confirmation time will be significantly improved, so it should increase exponentially when “The Merge” is completed. “
“The combination of these two indicators, macroeconomic and business use case technology improvements, has rocked China’s retail news. As a result, more Western institutions are also looking for ETH as a viable investment. We see it as the next paradigm shift in the Internet known as Web3.0. ”
Some analysts have taken a different view, telling investors that they are reducing their exposure to Bitcoin and increasing their holdings of ether.
Loan Venkatapen, co-founder and managing partner of Blocklabs Capital Management, talked about the issue and said that in the past few weeks, investors have turned the profits of holding Bitcoin into ether.
Jordy Pasquale, CEO of Cryptocurrency Hedge Fund Manager Bitbull Capital, also commented on this.
“Yes, ETH is now rising after Bitcoin has shown its strength. This shows that some profits may be circulating in the alternative and are normal, but BTC We can expect this trend to stop when we start another leg to do the best test ever. “
David Schwartz, Project Director of the Litecoin Foundation, gave a contrasting view.
“Bitcoin is also rising steadily, and during this time many altos have been rising and falling,” he said.
“I don’t think there is a clear line of decline in investment from one asset to another. Perhaps multiple reasons are ambiguous.”
Disclosure: I own Bitcoin, Bitcoin Cash, Litecoin, Ethereum, EOS and Sol.