Ethereum’s price rallies as institutional demand for the altcoin heats up
ETH's 12-month gains currently stand at an impressive 785%.
- JPMorgan's crypto research wing believes ETH's ongoing rise is being fuelled by the growth of the DeFi and NFT markets primarily.
- ETH reserves across centralised exchanges have continued to plummet to new lows throughout 2021.
- Ethereum rivals such as Solana and Fantom have continued to gain traction, with both projects registering gains of 200+% over the past month alone.
After having scared investors all across the globe by slipping as low as AUD$3,600 yesterday, Ethereum, the world's second-largest cryptocurrency by market capitalisation, has been in full recovery mode, currently up by 10% over the last 24-hr trade window. At press time, ETH is trading at AUD$4,300.
In terms of the factors fuelling Ethereum's ongoing price action, a recent bullish report from JPMorgan & Chase claims that the last few weeks have seen a growing list of institutional investors increase their exposure to Ethereum markets.
To further elaborate on the matter, the banking giant's crypto-analysis team believes that the rise of the decentralised finance (DeFi) sector and the non-fungible token (NFT) market have helped Ethereum immensely, with the altcoin's 21-day average Futures premium recently climbing to 1% over spot ETH prices, signalling growing mainstream demand for the asset.
Last but not least, it should be highlighted that net ETH reserves across all major trading platforms (i.e. CeFi exchanges) have continued to drop, with the said number plunging to 18.44 million ETH recently. To put things into perspective, this figure lay at 23.94 million ETH exactly a year ago.
Ethereum alternatives continue to gain traction
Thanks to Ethereum's seemingly never-ending gas fee woes, an increasing number of ETH alternatives (offering low cross-chain transfer fees) have been gaining traction with each passing day. In this regard, it should be highlighted that the value of various L1 and L2-based tokens have been rising, as is made evident from their growing total value locked (TVL).
More and more devs are making use of ETH alternatives that offer a higher degree of scalability, efficiency and transaction throughput. For example, over the last month, projects like Solana (SOL) and Fantom (FTM) have seen their values surge by more than 200%.
DEXs see their trade volumes rise amid China's latest ban
Popular decentralised derivatives exchange (DEX) dYdX saw a massive surge in its daily trade activity yesterday, especially as the Chinese government issued a fresh new circular asking local regulatory authorities to crack down on any crypto transactions taking place within the country. In this regard, dYdX is now processing more digital currency transfers on a daily basis when compared with Coinbase, one of the most prominent crypto exchanges in the world today.
Statistically speaking, since yesterday, dYdX has processed trades worth more than US$4.3 billion, a figure that is nearly 15% higher when compared with Coinbase's daily volume of US$3.7 billion.
Disclosure: The author owns a range of cryptocurrencies at the time of writing