Two factors pushed ETH to break through $2,000

After the price of Bitcoin continues to break through all-time highs, Ethereum seems to be unwilling to show weakness. February 20, 2021, as the world’s second largest market capitalization of encryption currency ,ETH Price breakdown 2000 USDT, A record high, an increase of 168% since the beginning of the year.

In fact, the rise of Ethereum this time is mainly driven by two factors.

First, institutional investment by retail investors in Bitcoin and a surge in investment, but also to more and more people begin to understand the currency encryption, and encryption investment money generated great interest. Since the beginning of the year, the price of Bitcoin has soared from $32,000 to more than $57,000.

Second, decentralized finance ( DeFi ) is booming, and many DeFi projects are running on the Ethereum blockchain. In the past few years, the market has been looking for “killer applications”, and now DeFi is the best answer. Decentralized financial services allow people to borrow, accumulate interest and exchange assets without going through financial institutions. According to DeFi Pulse data, there are currently more than 70 DeFi applications based on Ethereum, and the total lock-up value of these applications has exceeded US$42 billion. In addition, among the top 50 Ethereum-based projects, only two non- stable currency projects suffered losses (ERC-20 HEX and Compound Dai), others are showing an upward trend, and the price of 34 projects has more than doubled.

Paul Veradittakit, a partner at Pantera Capital, a cryptocurrency venture capital firm, said:

“ETH’s breakthrough of $2,000 proves the scalability of Ethereum, the surrounding DeFi and NFTApplication growth is also accelerating, proving that Ethereum is still the market leader in creating decentralized applications, all of which ultimately makes Ethereum an institutional-level asset class. “

As of this writing, according to Asset DashAccording to the data, the market value of Ethereum has risen to the 34th place in the world by assets, currently about 232.808 billion US dollars, an increase of 5.67%, and a single day increase of 9 places. It has surpassed Adobe, Pinduoduo, Salesforce, Nike, Coca-Cola, Cisco, Pfizer, etc Many well-known companies. Indeed, in terms of institutional assets, investors can use more Ethereum-based financial instruments, such as the USGrayscaleEthernet Square Trust Fund, the Toronto Stock Exchange ‘s Square 3iQ Ethernet fund.

Jordan Spence, Chief Marketing Officer of MyCrypto, a wallet management tool, believes that the price increase of ETH is caused by a combination of many factors. He explained:

“The rise in the price of ETH represents the climax of the entire cryptocurrency industry in recent years. More and more people are starting to catch up and want to participate in it. We have seen a lot of growth between Ethereum and DeFi, and ETH 2.0 also It is constantly moving forward.”

ETH 2.0 will upgrade the current Ethereum network from proof of work to proof of equity. It will be officially launched in 2020, but it is not yet fully functional. However, the Ethereum community hopes that Ethereum 2.0 can solve the problem of network congestion, thereby allowing value to flow more freely on the network and reducing rival blockchains (such asBinance Binance Smart Chain).

In any case, the Ethereum community has won $2,000. As for the next thing, let us wait and see.

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