The price of Ethereum has been moving from peak to peak in recent times. Since it hit $1500 earlier this year, breaking the previous all-time high that was held since 2018, the blockchain-based currency has been unstoppable.
Ethereum is the world’s second leading currency in terms of market capitalization. It trails only Bitcoin in terms of popularity and market cap. The famous currency has recently created numerous highs in the last month.
Each high only lasted for as short as possible, the $2500, $2600, $2700, $2900, and right now it has crossed the $3000 mark. What is behind the surge in the price of Ethereum however? This article highlights some reasons for the recent rally of Ethereum.
Reasons for the Recent Ethereum Price Rally
- Digital Bonds Issuance
Ethereum recently caught the eyes of the European Investment Bank. According to a Tuesday report from Bloomberg, the European Investment Bank is on course to issue a digital bond. The digital bond being will be in the highly priced Ethereum rather than regular fiat or any other asset.
It has also been revealed that the bond will last for two years and is worth about €100 million. This news from the past week positively affected the price of Ethereum. Following the news, the price of Ethereum saw a significant increase of about 5%.
As expected, when crypto assets catch the interest of large institutions, the value of such assets spring up and Ethereum was not an exception.
- Ethereum Improvement Proposal (EIP):
The Ethereum Improvement Proposal is a project that allows users of the Ethereum network to propose possible solutions to problems on the network as well as improvement of the product.
The concept was brought about by the co-founder and developers of the ETH blockchain. As a result, the network and its services can consistently improve to suit users of the platform.
Following the Berlin Hard Fork some weeks back, a lot of proposed improvements to the Ethereum network have been implemented. Users of the network have noticed a significant decrease in transaction fees.
Prior to the EIP 1559, transaction fees on the ETH network were killing. It has however come down to a record low in a long time. This has attracted more users to Ethereum based platforms.
Also, the proposed burning of Ethereum tokens that serve as a reward for miners and the upcoming launching of the Ethereum 2.0 will definitely lead to more bullishness for Ethereum in the coming months.
- Ethereum’s Ever-Increasing Use-cases:
When Ethereum was built, it was not to serve simply as a means of payment and a store of value like Bitcoin. Ethereum was created for the purpose of executing smart contracts, not restricted to the financial system.
As such, the use-cases of the asset have been increasing as technology keeps advancing. Ethereum is highly utilized in the NFT space as well as in the Defi space. It is not out of place to expect more and more uses for the digital asset to be unveiled in the near future.
Some crypto analysts speculate that Ethereum may be at the $5000 level very soon while some have even gone as far as projecting ETH to overtake BTC in the coming years.
In the meantime, whether these projections are accurate or not cannot be confirmed. Only time will tell. With the performance of ETH in the past few years, however, it is not illogical to expect that the highly valued digital asset perform better in the coming years.
Disclaimer: This article is not trading advice. TheDechained holds no liability for investments made on the basis of this information. We recommend independent research before making a decision to invest.