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The value of the second-largest cryptocurrency by capitalization exceeded the level of $1600, on Wednesday, setting a new price record. The capitalization of Ethereum exceeded $180 billion, and this happened against the background of relatively low trading volumes.
And on Thursday, Ethereum quotes on the Binance crypto exchange, for the first time, approached the $1695 mark. It should be admitted that this is truly the sharpest daily growth of the cryptocurrency for the first time since January 24. After 24 hours, this digital asset has risen in price by 7%, and since the beginning of this year - by all 137%. Given the growing popularity of Ethereum, according to BitInfoCharts, transaction fees on its network were at record highs of around $16.4. As for transactions on decentralized exchanges that operate on the Ethereum blockchain, they cost users about $60- $100. Most likely, the altcoin network simply cannot cope with the load.
To date, Ethereum is trading at $1632 against the US dollar. Before that, the altcoin reached its all-time high: on January 19, the digital currency began trading at $1428 for the first time. And two weeks later, the altcoin has already managed to rise above $1500. The strong price swings of many cryptocurrencies today are largely due to Ethereum, which has recently inspired a lot of optimism in the entire crypto industry.
The growing popularity of Ethereum is seen in light of the growing activity in the derivatives market. Crypto market participants are optimistic about the future of altcoin and its market capitalization.
When the price of Ethereum rose above $1300 in early 2021, the founder of the DTAP Capital investment fund Dan Tapiero noted that the interest of institutional investors will largely contribute to the further growth of altcoin. Tapiero said that the multinational corporation Standard Chartered and the financial services provider Northern Trust are planning to launch a custodian service with support for the two largest cryptocurrencies by capitalization, namely Bitcoin and Ethereum. If Northern Trust is going to hold these cryptocurrencies, then this means only one thing: they have buyers for both of these assets.
On February 8 this year, the Chicago Mercantile Exchange, or CME, will start trading futures on Ethereum. This event can both push the altcoin quotes to overcome new price records, and significantly bring them down. Recall that in 2017, the launch of bitcoin futures coincided with the beginning of a long-term phase of decline of the most popular cryptocurrency.
Given the skyrocketing price of Ethereum, other altcoins could drop sharply. And this may happen due to the fact that investors will start selling many digital coins that have already demonstrated significant growth in recent months, in order to buy Ethereum. Thus, market participants need to take a closer look at other virtual coins that have not yet been overbought. Ethereum's closest competitors to look at are blockchain platforms Polkadot (DOT), Cosmos (ATOM), Solana (SOL), and Filecoin (FIL). The popular tokens of the decentralized finance segment, or DeFi, are also seen as interesting. This includes virtual coins Uniswap (UNI), ChainLink (Link), Maker (MKR), and Compound (COMP).
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