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Ethereum steals the spotlight of Bitcoin, surging to USD 1,439 Monday and surpassing its previous all-time high of USD 1,432. Meanwhile, Bitcoin is trading flatline. It seems that Ethereum is breaking away from the correlation with Bitcoin that’s been apparent in the past few months.
Investors have been waiting for 3 years for this to happen. 2020 was the year of the DeFi ecosystem, with ETH surging to USD 400 from less than USD 200 per ETH. Other DeFi tokens such as Chainlink, Uniswap and SushiSwap all rallied to new highs.
The recent rally of ETH could be attributed to the launching of ETH 2.0, which promises lower fees and faster-responding speed. Like Bitcoin, ETH is getting more attention and recognition from institutional investors. The Chicago Mercantile Exchange (CME Group) recently announced that its cash-settled Ether Futures will be launched in February 2021. Analysts expect this move will allow more money to flow into ETH.
With wider adoption, ETH could reach USD 2,000 in the coming months. The total open interest for ETH options reached its all-time high of USD 1.8 billion. Open interest refers to the total number of outstanding derivative contracts that have not been settled for. It measures the flow of money into a futures or options market and signals the trading sentiment of the market.
Traders are quickening their pace to withdraw ETH from exchanges. The ratio of EH tokens depositing at exchanges has dropped to 22% from the 26.33% of September. This usually indicates increasing hodling sentiment among traders.
Ethereum 2.0 is an upgrade aiming to enhance the network’s scalability, programmability, and security. After its completion, the Ethereum blockchain will fully adopt proof-of-stake(PoS) to secure its network, while ETH 1.0 employs a consensus mechanism known as proof of work (PoW). The whole process is divided into 4 phases and is expected to last for at least 2 years.
The final phase of ETH 2.0 is expected to launch in 2021 and it is not the end for Ethereum blockchain. With the release of ETH 2.0, users could utilize ethereum in a much cheaper and efficient way, while getting more security. The increase in usage comes with greater demand that could send ETH’s price to new heights.
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