The material was prepared by Dmitry Volkov, technical director of the international crypto exchangeCEX. Io
In recentthere has been a stir on the market for several monthsaround the ETH token. And if earlier institutional and retail investors preferred to invest in futures and spot contracts for bitcoin, today ether is catching up with the main cryptocurrency in terms of these indicators.
We are at CEX.IO we observe an increase in trading volumes in July by 2 times compared to June 2020. And we associate this growth with the increased interest of market participants in ETH, in particular, due to DeFi and the imminent release of Ethereum 2.0. Now ETH is a growth driver, it pulls up other cryptocurrencies, in particular BTC. For the week from July 20 to July 26, the average daily ETH turnover on the exchange was 3 times higher than the average daily ETH turnover in June.
I will give a few main reasons that move the price of the coin up, and also attract investors to invest in this cryptocurrency.
The first and main reason is the launch of the updatedplatform versions, Ethereum 2.0. This event became so long-awaited and important for the community that, according to the indicators of the resource Google.Metrics, the number of requests for “Ethereum 2.0” exceeded the number of searches related to Bitcoin halving. In other words, the community considers this event so much more important to the industry as a whole that the third Bitcoin halving seems like a passing event by comparison. Why is the launch of Platform 2.0 important? Many cryptocurrency holders are confident that with the launch of ETH 2.0, a new era of the crypto market will begin. First, the Ethereum platform is the most popular platform for creating new projects and deploying new cryptocurrencies. Imagine that about 2000 tokens that are currently on the CoinMarketCap resource are ERC-20 tokens deployed on the Ethereum platform, including such popular ones as USDT, tokens of cryptocurrency exchanges Binance, OKEx and others. Moving to a new platform will make the process of deploying new cryptocurrencies even easier, and the price of gas will be lower. Transactions on the Ethereum network will be faster and cheaper. Undoubtedly, this will lead to an influx of users, and the capitalization of the coin itself will increase.
The second reason that follows from the first isstarting a staking program. Now holders of 32 ETH can take part in the staking program and receive passive income by keeping coins in their wallet. This perspective is very inspiring for the ETH supporters. In the past few weeks, we have seen that the trading volumes of the token have increased, and several investment companies in the USA are offering their clients a special service that opens up the opportunity to purchase those required 32 ETHs and join the staking program.
The third probable reason, in my opinion, isthe rapid development of the DeFi market. If we analyze the historical development of the decentralized finance market, we can see that over the past two years, the capitalization of the DeFi market was only $ 2 billion. And over the past 2 months, the capitalization has exceeded $ 8 billion. This indicates the rapid development of the market. And if we consider that most applications for decentralized finance are deployed on the Ethereum platform, it is clear that such an increase will have a positive effect on the value of the main token. Today we see that the ETH token is growing rapidly, surpassing its three-year maximum. The coin is trading in the region of $ 403 - $ 425, and there is every chance that after the launch of ETH 2.0, which is scheduled for 2021, the value of the token will rise to $ 500 - $ 550.
As for the increase in trading volumes, theneverything is clear here. The price of the coin is rising, and investors are interested in maximizing their profits by playing on the rising price. By the way, if you look at the history of trading in futures on the ETH with physical delivery, you can see a significant increase in indicators. It is likely that investors want to buy those required 32 ETHs in advance at discounted prices, expecting a rise in the value of the coin after the launch of ETH 2.0.
