Ethereum continues to break new grounds as supply crunch looms
Following last week’s dip, Ethereum has rebounded and has proceeded to set a new all-time high. The price of the second-largest cryptocurrency by market cap currently stands at above $2,700. Analysts are predicting that the next stop could be $3,000.
Despite the market crash of last week, the timing of the recent rally is not surprising. Just last week, the world’s first Ethereum exchange-traded funds (ETFs) began trading in Canada. These products allow investors to gain exposure to Ethereum without actually purchasing or storing the digital asset.
Away from ETFs, the Ethereum Berlin upgrade recently went live, and anticipation is building up ahead of the EIP-1559 gas-saving upgrade, which has been scheduled for July.
EIP-1559 will change the way fees are calculated and paid to miners. Following the upgrade, a certain amount of ETH that would have otherwise been paid to miners will now be burned. The upcoming network upgrades will effectively lower ETH’s supply, and investors are generally feeling bullish.
Looking at Ethereum’s rally to $2,700, the digital asset began the week trading at around $2,400. As of press time, it was exchanging hands at $2,717 after hitting a 24-hour high of $2,735. Since 2020, Ethereum has surged by more than 1,000%. A lot of this gain can be attributed to the DeFi and NFT boom.
Rising institutional interest
Institutional investors are beginning to pay close attention to Ethereum. While Bitcoin still retains its title as a possible store of value, investors are also turning to ETH as a potential hedge against inflation. Some industry players have suggested that the digital asset could rise to $20,000 or even surpass Bitcoin. It is only natural that bullish investors will try to jump on the Ethereum train early.
Back in March, Chinese tech giant Meitu invested $40 million in Bitcoin and Ethereum. Canadian regulators also approved three Ethereum ETFs a few weeks ago. As reported by BTC PEERS, the Ethereum products are already off with an impressive start. The funds collectively attracted more than $138 million in trading volume a few days after launch.
To further prove that interest in Ethereum is spiking, the number of Ethereum on the ETH 2.0 staking contract recently crossed 4 million ETH (more than $10 billion at current market prices).
