Ethereum broke through $4,000 and hit a new high. The reason was that institutions acted in unison?
Less than a week after breaching $3,000, the second-largest cryptocurrency, ETH, has soared over $4,100, or more than 33%, to another all-time high. Ethereum is up more than 400% since the beginning of the year.
Another piece of good news is that according to the current market value in circulation, Ethereum will rise by about 129.6%, and it will surpass Bitcoin. Are you excited or looking forward to it?
In early May, ETH officially overtook Bank of America to become the 28th largest asset in the world. This record was quickly rewritten, and ETH has now surpassed the market capitalization of consumer staples giants Walmart and Johnson & Johnson, entered the ranks of the top 20 assets with the largest market capitalization, and is approaching JP Morgan Chase and Samsung. You know, JPMorgan Chase is the largest bank in the United States by assets under management.
Ethereum’s market dominance hit a 3-year high of around 19%, according to CoinMarketCap.
Analyzing the reasons for the rapid rise, a very important aspect is that institutions have greatly increased their interest in ETH. They know ETH through BTC and start to configure it.
This week, a report from Coinshares stated that institutions bought more than $30 million in ETH as of the end of April, and money managers now own $13.9 billion in ETH and ETH financial instruments.
At the same time, ETH has also made significant progress in traditional financial markets. Last week, the European Investment Bank announced that it would partner with major banking entities such as Goldman Sachs to issue the world's largest layer-1 bond, with an offering size of $120 million. Additionally, the growth of decentralized finance, one of Ethereum’s main communities and use cases, continues to grow.
On May 7, asset management firm VanEck formally submitted a proposal for an ethereum exchange-traded fund to the SEC. It is a convenient, cheap and regulated option for investors looking to buy cryptocurrencies on the stock market.
This year, Canada has launched four Ethereum ETFs. The first three were launched by Purpose in mid-April, with Evolve and CI Global Asset Management, and saw $138 million in trading volume in their first week. 3iQ has launched the fourth Canadian Ethereum ETF at the end of April.
Another reason for optimism is Ethereum's upcoming major network infrastructure upgrades: EIP-1559 and ETH 2.0. EIP-1559, now scheduled for inclusion in the “London” hard fork, will include an overhaul of ETH’s fee structure and promises to significantly reduce gas costs while also potentially making ETH a deflationary asset.
In turn, ETH 2.0 will transition the network to a proof-of-stake consensus mechanism that will hopefully reduce sell pressure and encourage long-term holdings of ETH assets.
This extraordinary series of upgrades reignited speculation and became a much-anticipated event.
Despite a rise of more than 400% since the start of the year, some experts predict that ETH’s gains will grow further, and its market capitalization will even surpass that of Bitcoin. For example, billionaire Dallas Mavericks owner Mark Cuban believes that Ethereum will continue to move forward and outperform Bitcoin.
