Rothschild Investment Corp Acquires Over 250M Shares in Grayscale ETH Trust

In a recent filing with the United States Securities and Exchange Commission (SEC), the Chicago-based Rothschild Investment Corp revealed that it has purchased 265,302 shares in Grayscale’s ETH trust, while also adding to its Grayscale Bitcoin Trust holdings.

The filing revealed that the total GBTC shares the company owns stands at 38,346, a boost from the 30,454 shares it owned in January. The Ethereum holdings with the group represent a new position.

There are speculations amongst market observers that the first quarter of the year has a lot of influx of institutional investment into the digital currency ecosystem through trusts such as Grayscale’s. The speculations are rife as this period coincides with the great push in the price of Bitcoin (BTC), Ethereum (ETH), and the entire cryptocurrencies as a whole.

The Rothschild Investment Corp was established in 1908 by Monroe Rothschild and brother-in-law Samuel Karger and the firm has no affiliations with the infamous Rothschild family dynasty. The firm is one of the earliest mainstream investment outfits to dabble into cryptocurrencies, owning as much as $210,000 worth of GBTC back in 2017 according to an earlier filing with the SEC. At the time, Bitcoin was priced somewhere around $2000 per coin.

The potentials for BTC to serve as a viable and functional store of assets for corporate firms is no longer disputable. Firms like business intelligence and software firm MicroStrategy Incorporated, electric automaker Tesla Inc and Square Inc amongst others rank as some of the outfits divesting their excess liquidity into the growing asset class. Besides the Rothschild Investment Corp, Chinese tech company, Meitu Inc is also a prolific Ethereum investor.

The digital currency ecosystem is still relatively new, and the flow of institutional funds by firms like Rothschild, and the other acclaimed crypto-backers will help fast-track the long-sought shift into the mainstream adoption era.

Dapper Labs Cryptokitties are making a resurgence in action

The data collected by The Block Research shows an ongoing Uptick activity on Cryptokitties, the longstanding collectible game built on the Ethereum blockchain.

For comparison’s sake, the resurgence was near the heights of network congestion in 2017, when the cat-trading craze on Cryptokitties exploded that paralyzed the entire Ethereum network for some time.

Weekly data indicates that Cryptokitties are looking for more uses than from April 2019.

Weekly trade volume data also illustrates a ramp in activity, reaching $ 1.83 million for the week starting Feb. 28.

Cryptokitties launched in 2017, the brain of Dapper Labs, the company that develops the Flow blockchain.

According to the data on the chart, NFT activities are being dominated by another Dapper Labs product, NBA Top Shot.

As Tobocqa Crypto Magazine reported, Dapper Labs was raising $ 250 million in a new funding round last month. Last August, Dapper Labs raised $ 18 million from ICO Flow on the Coinlist platform.

The resurgence of the Ethereum economy

On February 22, a surprisingly bizarre headline appeared in the New York Times business: “Why is a flying cartoon cat with a fat body on sale for $ 600,000?”

If you had access to the internet in 2011, you certainly know that cat. Indeed, Chris Torres, the creator of the internet’s beloved “Nyan cat” GIF (a pixel art kitten glowing in space over a rainbow), has somehow sold the meme for decades. his age for nearly 600,000 dollars.

And it’s not just Torres looking to sell this kind of digital content that was previously deemed worthless – partly because anyone can copy and paste digital files on the fly. Just in the past few weeks:

Christie revealed plans to auction the first “all-digital” work in the form of a series of images created by artist Beeples with a starting price of $ 100.

A very cool looking lo-fi monkey – part of the Cryptopunks series – sold for $ 1.5 million.

A series of 3D models for “impossible furniture”, such as a table made of bubble gum, raked in $ 450,000.

A single tweet from Dallas Mavericks businessman and owner Mark Cuban was priced at $ 952.

All of these stories really say the same thing: people buy assets in the digital, virtual world with large sums of money in the real world.

This growing market is made possible by a cryptocurrency called NFT. Non-fungible tokens (NFT) are essentially certificates of authenticity that indicate that the version of a digital file can be continuously copied-pasted (whether it’s an image, a video, a song, or almost any). something else) is real.

NFTs are primarily issued on the Ethereum blockchain, leveraging the “smart contract” function, and can often be bought or sold on markets dedicated to them. While they’re making a splash right now, NFT isn’t really a brand new. You might recall the craze of Cryptokitties 2017, a digital cat trading game.

NFT projects on Ethereum by total volume sold as of 2/3/2021 | Source: CryptoSlam.io

NFT is a token like Bitcoin and can often be bought or sold through special exchanges that support the service. But unlike Bitcoin, each individual coin is virtually identical in characteristics, each NFT representing a specific digital property. Therefore, “irreplaceable”. They have been used to sell everything from celebrity gadgets, NBA’s “digital collectibles” to virtual real estate and live clips of dance star Deadmau5.

As they turned into surprisingly large businesses, with an estimated revenue of more than $ 100 million, the NFTs sparked a philosophical debate around the meaning of ownership. Is collecting digital artifacts different from collecting rare sneakers, vinyl records, or Picassos in that respect?

Those are intriguing questions, but they don’t even involve a larger story the NFT can help us understand. In that bigger story, smart contract technology that makes it possible for artists, meme makers, and musicians to sell their virtual gadgets is also pushing for a new decentralized alternative to the financial system. present. In that alternative system, designed to economically empower individuals, that will flow through faster, cheaper, more transparent, and open source protocols that are available to all.

That is Finance 2.0. And it’s already starting to show up if you know where to look.

Ethereum’s breakout year

Prior to the NFT craze, Bitcoin has received a large share of the non-crypto media headlines lately. But people already in this space tend to get even more excited when the topic of Ethereum emerges. And not (mainly) because ETH is the second largest cryptocurrency by market cap after Bitcoin.

What casual observers tend not to understand about Ethereum is that it’s not just another form of digital currency. The Ethereum blockchain was created to be a highly flexible decentralized computing platform – a platform that allows developers to build things like a marketplace for digital arts and run financial ‘tools’. Decentralization ”(DeFi) like Compound and Uniswap has raked in hundreds of billions of dollars in the flow of value through them.

Part of the Ethereum story is similar to the one you’ve heard about Bitcoin. Like Bitcoin, ETH (which is the native cryptocurrency of the Ethereum blockchain) increased in price and popularity – climbing from an average of $ 300 to a high above $ 2000 in February.

Ethereum has also seen record global search interest in recent months. Bitcoin is still inferior to its peak search era, which emerged during a wave of widespread popularity in late 2017 and early 2018.

Global search interest in Ethereum | Source: Google Trends

Another indicator of the mainstream increase in engagement is Ethereum-specific Reddit message boards (as well as cryptocurrencies in general), which has seen an increase in new subscribers in recent days:

Total number of crypto subscriptions Reddit | Source: SubredditStats

One important reason is the price of ETH. You may be surprised to learn that the price of ETH has actually risen faster than Bitcoin since the start of 2021 – partly because the large number of retail investors with arbitrary extra time and income due to the COVID epidemic are trying. experience new investment strategies. While Bitcoin’s price has risen around 65% since the start of the year, ETH is up more than 112% in value – with a market cap of $ 177 billion (bigger than Morgan Stanley or Square).

Learn about the broader Ethereum economy

But the bull market cap is only part of the story. What’s really fascinating about Ethereum is that the value of ETH is just the most visible part of the broader economy that the Ethereum blockchain creates.

Think of ETH as the visible part of the iceberg. Because the Ethereum blockchain is so flexible, with vast economic activity happening just below the surface – in the form of crypto portfolios offered by Ethereum include DeFi, stablecoin, wrapped token, and NFT.

Overall, the market cap of the Ethereum economy (as defined by the total market cap of the largest ERC-20 tokens issued on the Ethereum blockchain) has skyrocketed in recent weeks to over $ 250 billion. (NFT is not included, as it is difficult to compare).

Market capitalization of the Ethereum economy | Source: CoinMetrics & CoinGecko

Stablecoins are designed to reduce volatility by attaching their value to reserve assets such as US dollars, which are one of the most promising and rapidly growing sectors of the Ethereum economy. They have been widely accepted as a stabilizer for making payments between exchanges.

As of February 2021, the total dollar value of stablecoins on the Ethereum blockchain has surpassed $ 30 billion:

Stablecoin market cap on Ethereum | Source: CoinMetrics

A smaller but also rapidly growing component of the Ethereum economy is the “wrapped token”, which allows cryptocurrencies other than ETH – especially Bitcoin – to be used on Ethereum and easily interact with. DeFi applications. As a result, the value of Bitcoin tokenized increases dramatically.

Tokenized BTC Market Cap | Source: CoinMetrics

When Reddit met DeFi

So what has driven all this recent activity? Of course, a lot of that has to do with the huge boom in cryptocurrencies. But an interesting component worth a closer look is the internet-proficient investors on Reddit – who were inspired by a nasty experience with traditional financial systems in search of little alternatives. more focused.

These decentralized tools (also known as “DeFi” or “Finance 2.0”) enable profitable investments, trading, savings, new types of “fast” loans, and more. According to Fabian Schär, professor and researcher at the University of Basel, Ethereum-powered DeFi applications have “the potential to create a truly open, transparent, and immutable financial infrastructure”.

The DeFi overview encompasses three categories of applications, with the same goal of becoming faster, more efficient alternatives to inefficient, slow, and often expensive paths that flow through the system. current finance.

Decentralized exchanges like Uniswap and Sushiswap, allowing users to trade tokens without an intermediary.

Saving and lending protocols such as Compound and Aave allow users to borrow and lend tokens without an intermediary.

Oracles like Chainlink aim to deliver real-world data to DeFi applications.

For traders on Reddit whose belief in the Finance 1.0 system has been shaken, DeFi is a natural home – and because these frequent online investors exchange tips and strategies quickly, they have can help each other explore complex new protocol (That doesn’t matter how comfortable the group is with the risk, since the DeFi market can be volatile).

At least one prominent voice began spreading DeFi directly to Reddit’s most active stock traders. During a Q&A hosted by the wallstreetbets subreddit, Mark Cuban shared his belief that DeFi would make “the market more efficient, transparent and available to small investors”.

And not only Cuban thought so. During a live stream with US Representative Alexandra Ocasio-Cortez, Reddit co-founder Alexis Ohanian offered his own stance to DeFi:

“The public cannot see this and so I think there will be more and more energy to find decentralized solutions. There is too much energy driving something to keep the game from being cheated ”.

The total DeFi market has grown to over $ 40 billion in February 2021. In a strong indicator of the popularity of these tools, the largest decentralized exchange Uniswap has reached a volume of $ 100 billion since its launch in May 2020.

DeFi Market Cap on Ethereum | Source: CoinGecko

Monthly volume across all decentralized exchanges broke the $ 50 billion mark in January:

DEX volume by project monthly | Source: Dune Analytics, hagaetc

Institutional circles accept Ethereum
The Ethereum economy has also attracted the attention of major financial institutions. Thanks in large part to the popularity of stablecoins as a method of sending value without fluctuating between exchanges and the DeFi protocol, the Ethereum blockchain has become one of the most popular means of paying with US dollars.

In 2020, Ethereum processed $ 874 billion worth of payments, competing with many major user-oriented systems such as Zelle ($ 307 billion) and Paypal ($ 963 billion), although it remains. Much lower than the volume handled by central bank settlement systems like Fedwire ($ 840 trillion).

In December 2020, Visa announced it was connecting its global payments network of 60 million merchants with stablecoin USDC.

Paypal also recently enabled limited ETH transactions for its vast US user base, and is planning to expand that functionality to all 325 million global users. CEO Daniel Schulman said:

“We all know the current financial system is outdated and can envision a future where transactions are completed in seconds, not days. We are investing significantly in the new crypto, blockchain and crypto business to help shape this more inclusive future.

Meanwhile, institutional investors are starting to move to Ethereum. The Grayscale Ethereum Trust (allowing investors to expose ETH through traditional brokerage firms) has grown significantly. The fund currently holds 3 million ETH with a value greater than $ 4 billion.

Total holdings of Grayscale Ethereum Trust | Source: Skew

CME futures (another means of communicating with institutional Ethereum) recently went live and traded over $ 33 million on its very first day. In December 2020, Connecticut-based hedge fund One River Asset Management revealed commitments to “bring Bitcoin and ETH holdings to around $ 1 billion by the beginning of 2021”.

Ethereum is evolving

When Ethereum was created in 2014, the founding team was well aware that blockchain had a fundamental flaw that would eventually need to be fixed. Because it uses a Proof of Work “consensus mechanism”, transaction times slow down and fees increase as blockchain traffic increases.

The huge number of transactions that DeFi and other smart contract-enabled tools have mentioned in this article cause congestion and scalability alarms. As a result, the network is becoming more and more expensive to use. As of February 2021, each transaction costs about $ 10 in Ethereum “gas” fees.

Average Ethereum network fees | Source: CoinMetrics

But great solutions are about to come. The nonprofit Ethereum Foundation has officially partnered with Reddit to find a new solution and use case for the technology. In August 2020, nearly 20 groups of developers submitted Ethereum scaling proposals to Reddit. Projects like Optimism can help blockchain handle hundreds of thousands of transactions per second (although each solution presents its own challenges).

Meanwhile, the Ethereum community has begun a long-planned transition to a faster, cheaper, and theoretically even more secure Ethereum 2.0 (or ETH2) blockchain.

The ETH2 blockchain uses a Proof of Stake consensus mechanism, which significantly increases capacity. It launched in December 2020 and as of February 2021, more than 3 million ETH were staked in ETH 2.0 contracts. At the end of this multi-year upgrade, the Ethereum economy goes one step further to realize its potential to make financial transactions of all kinds faster, cheaper, and more accessible.

Vitalik proposes a solution to link Layer-2 scaling projects

The L2 DeFi protocols are currently unable to communicate with each other, so Vitalik proposed a fix.

In a relentless effort to combat escalating transaction fees while creating a unified ecosystem, Vitalik Buterin proposed a specific cross-rollup scaling solution.

The proposal outlines how two protocols using rollups can communicate with each other while maintaining interoperability and aggregation.

Rollups are Layer-2 solutions that are essentially a smart contract network that processes and stores transaction data off the main chain. However, there are several different types of aggregation, with each using unique smart contracts as optimistic and knowledge-free.

While some DeFi projects have implemented Layer-2 rollups, such as Loopring and Synthetix, the characteristics of the different rollups mean projects cannot communicate with each other directly on Layer-2. .

Buterin’s proposal assumes that one aggregator can process simple transactions while the other one has full smart contract support. There have been handover proposals between two smart contract-enabled protocols using rollups.

To explain how the proposal works, Buterin provided an example of a hypothetical trading intermediary he calls “Ivan” – where Ivan has an “IVAN_A” account on update A that he completely control and also some money is deposited into the smart contract “IVAN_B” on rollup B.

The smart contract will be programmed to accept “memos” including additional data from anyone who sends it to secure any future transactions. Transactions create a connection Layer that holds deposits in all these isolated contracts, allowing summary A to send to summary B through this Layer.

Buterin suggests that the behavior works like this:

“Alice sends a transaction to IVAN_A with N coins and an ALICE_B memo. Ivan sends a TRADE_VALUE * deposit transaction (1 – fee) via IVAN_B to ALICE_B ”.

He added that worst-case behavior would be if Ivan didn’t send money to ALICE_B as he expected.

Solving the “worst case” that could arise from using the proposed scenario, Buterin emphasized that, Alice can still wait until the transaction on rollup A confirms, find some alternative ways to receive coin on rollup B to pay the fee, and then simply claim your funds.

In response to the proposal, Alon Muroch pointed out that it works in a similar way to how banks delete transactions:

“It’s very interesting, similar to how banks delete transactions between themselves. Dividing assets into separate accounts can have limitations, a solution could be just large pools on either end, and scaling fees.

Matter Labs, the Layer-2 development project on Ethereum received investment from many big companies

With the need to scale Ethereum reaching large volumes, the number of decentralized financial projects and internet companies investing in layer-2 solutions is increasing.

A Series A funding round for the Matter Labs zkSync layer 2 scaling protocol has been announced. Its goal is to bring the Solidity smart contract language to the platform.

The round is led by a number of big names in the crypto and internet security industry including early Twitter investor Union Square Ventures (USV), Cloudflare, Firebase, Twilio, MongoDB, and exchange giant Coinbase.

Matter Labs first released its layer 2 product in December 2019 after raising an undisclosed sum to limited partners. zkSync tweet:

“Pleased to announce an ecosystem investment round to become Ethereum’s main payment backbone – and turn into an EVM-compatible ZK aggregator.”

Layer 2 is evolving

zkSync speeds up Ethereum transactions by using knowledgeless aggregates to batch execute and process them off-chain. It can also provide the same security guarantees as a normal smart contract on layer 1.

The message says security will be an important factor for users to decide which layer 2 solution to deal with.

“The crypto community will especially prefer the solutions with the least damage in terms of security, decentralization and user experience.”

In addition, the zkSync ecosystem can grow indefinitely, taking advantage of the ability to synthesize and combine network effects. This is crucial for protocols like Aave, Balancer, and Curve, which are already worth billions of dollars.

zkSync processes more than 1.1 million transactions and is integrated into a number of dApps and platforms including Golem, Numio, StablePay, and Storj.

Matter Labs is expected to integrate more into major wallets such as those provided by Coinbase and Huobi, adding that it could become Ethereum’s primary payment.

“All users will be able to create and be able to fund their accounts directly from exchanges or services on the network (e.g. Coinbase, Huobi, Binance, Ripio or Moonpay) without a let’s take a layer 1 transaction ”.

The investments from the seed round will be channeled into bringing Turing-complete smart contracts with Solidity to zkSync via its own Zinc programming framework. The blog post says a public testnet for zkSync smart contracts will roll out in the next few months.

Gas charges have gone up again

Gas fee break time is not long due to transaction costs tend to increase again. As major crypto assets are starting to show signs of recovery following last week’s correction, average transaction fees are also on the rise.

According to BitInfoCharts, Ethereum transaction fees averaged $ 13, down from a peak of $ 40 last week but still not very optimistic after a slight drop over the weekend.

Even at these levels, micro-transactions on the network are impossible, making the demand for layer 2 payment channels like zkSync even greater.

Ethereum maxism turns ugly with a pointless attack on Binance Smart Chain

Ethereum maximists are trying to push Binance Smart Chain (BSC) into its path of user censorship by deploying pointless and conflicting contracts on this rapidly growing blockchain.

Seemingly a desperate and insignificant attempt to win back a competitor, they are currently advertising the token “TANKS OF TIENANMEN” (roughly translated: tanks of Tiananmen), inspired by gave his life for democracy in Tiananmen Square in 1989.

Bankless co-founder David Hoffman called attention to the token in his tweet with a popcorn emoji but is being condemned for his efforts to promote it.

“Someone deployed” TANKS OF TIENANMEN “for Binance Smart Chain. Let’s see how far this goes. Binance’s CZ will stretch out? Or risking the wrath of China? Cypherpunks know how to attack us. system and how to protect it ”.

“This is not the ETH community I want to be a member of,” wrote a member of the Ethereum community. “Bowing in the face of racism and culturally sensitive events is despicable and should not be tolerated. Two wrong does not turn out to be true, let’s make sure ETH can scale, ”replied an indignant Twitter user.

Famous Youtuber Lark Davis described the attack as “shocking”.

However, there are still people who praise the “great step”:

“This is an utterly evil – and wonderful – way to put pressure on Binance. Congratulations, ”ProgPOW author Kristy-Leigh Minehan tweeted.

Binance CEO Changpeng Zhao commented on the “attack”, tweeting that it can be handled at the level of the probe.

Scalability vs. decentralization

Over the past few weeks, Binance Smart Chain, a high throughput platform aimed at connecting DeFi and CeFi, has emerged as an “Ethereum killer” because of its low transaction fees. In his viral tweet, CZ quipped that Ethereum is only for the rich “who will soon be poor”.

However, the bottom line of Ethereum arguably is its hypothetical decentralization. The BSC-controlling node operators are essentially voted by Binance himself because it is the top holder of the BNB native token.

For DeFi speculators, centralization seems like a reasonable trade-off for cheap fees, and “testing” the blockchain with meaningless content is ultimately in vain.

Ethereum is on track to settle $ 1.6 trillion this quarter

ETH usage is skyrocketing this year, with the value of paid transactions on the network skyrocketing in 2021.

According to research from Messari, Ethereum has so far settled $ 926 trillion worth of transactions this quarter, 700% more than it was processing in Q1 2020.

The Ethereum network is currently on track to process $ 1.6 trillion in transactions for the first quarter of this year. Over the past 12 months, Ethereum has processed $ 2.1 trillion in transactions.

If Messari’s $ 1.6 trillion forecast is correct, Ethereum’s quarterly settlement value will increase by 1,280% from Q1 2020 and more than 5,000% from Q1 2019.

Messari researcher Ryan Watkins noted that the data reflects the popular story that Ethereum is witnessing a migration of users amid high gas fees, adding:

“The staggering scale for a technology that critics say cannot scale.”

Ethereum’s recent increase in settlement value could be attributed to the explosive development in the DeFi sector and non-fungible tokens (NFT), most of which are based on Ethereum.

Huge demand online has caused gas prices to rise to all-time highs. With many retail traders increasingly losing their money using the Ethereum network for smaller transactions.

Average Ethereum transaction fees soared to a record high of $ 40 on Feb. 23, with Ethereum generating $ 50 million worth of transaction fees in just one day.

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Cryptofees.info is currently reporting an average daily fee of $ 32 million for ETH over the past seven days. In comparison, Bitcoin only generated an average of $ 8 million per day over the past week.

According to Bitinfocharts.com, average transaction fees rose to a record high of nearly $ 40 on Feb. 23. At the time of writing, Ethereum fees have dropped to an average of $ 21.

Amid high fees, many crypto KOLs are urging the rapid launch of ETH 2.0 to ease the pressure on the congested PoW network.

After all, the most profitable people are still the miners.

Key factors have pushed ETH above $ 2k

ETH price has risen above $ 2,000 with strong momentum while BTC has only risen slightly over the past 24 hours.

There are 3 main reasons driving ETH’s explosive rally: DeFi’s rapid growth, the hype surrounding ETH following the listing of CME futures, and a drop in the number of BTC and ETH on exchanges. .

ETH / USD 1 day | Source: TradingView.com

The hype revolves around ETH CME futures
ETH hit the $ 2,000 mark for the first time after launching a CME ETH futures contract earlier this month, primarily targeting institutional investors.

Prior to listing, it was widespread information that listing on CME would cause ETH’s price to drop significantly, as listing of Bitcoin CME futures in 2017 coincided with the local BTC peak at the time.

However, ETH has been steadily bullish since then, surpassing its all-time high and $ 2,000 on Feb. 20. The new milestone shows that there is currently significant institutional hype surrounding ETH. This is also demonstrated by the Ethereum Trust of Grayscale continuing to buy ETH in February.

DeFi’s explosive growth

According to data from Dappradar.com, the total locked-out value (TVL) of the DeFi market is close to $ 50 billion.

Total locked values ​​in DeFi | Source: Dappradar

The term TVL is used to measure the amount of capital locked in all DeFi protocols. For example, if $ 2 billion is being used on a loan protocol for borrowing or lending, it means the protocol’s TVL will be $ 2 billion.

ETH benefits directly from the high TVL of the DeFi market as ETH is used as a means of paying transaction fees on the Ethereum blockchain network.

Therefore, the higher the demand for DeFi protocols and services, the more conducive to the value of ETH in the market.

The reserve of BTC and ETH continues to decrease on exchanges

Meanwhile, Bitcoin’s price shows no signs of slowing down as it has broken out of the $ 57,000 level and is holding the $ 50,000 zone as solid support. Part of the reason for this is that the number of BTC as well as ETH available on exchanges is decreasing, reducing selling pressure.

Additionally, as long as the Bitcoin price continues to demonstrate resilience above $ 50,000, ETH’s strong momentum is likely to be maintained in the near future.

According to analysts at Santiment, the crypto community also has a significant interest in ETH. When the price crosses $ 2,000, 33% of all crypto discussions are related to ETH. They wrote: “Well, the ETH price quickly reached over $ 2,000. The price went up to $ 2,041 just 1 hour after our post was posted! Address activity reached its highest level in a month. And 33% of all crypto discussions have something to do with ETH ”.

If the momentum of the dominant cryptocurrency Bitcoin remains intact and investors continue to withdraw ETH from the exchanges, the likelihood of the price continuing to surpass the $ 2,000 level is likely to increase.

ETH set a new all-time high above $ 2,000 as the price continues to rise

ETH surged above $ 2,000 as it continues a year-long bull run.

ETH / USD 5 days | Source: Tradingview

ETH hit a new record of $ 2,042, corresponding to a 6.18% increase in 24 hours, a market cap of $ 233.3 billion. Prices have risen 172.5% year-to-date.

While ETH hitting $ 2,000 is the latest event, it will almost certainly be overshadowed by the many milestones already reached a few hours ago from BTC including reaching a market cap of $ 1 trillion. first dollar and up almost $ 5,000 over a 24 hour period.

But it should not be overlooked that ETH’s increasing move and increasingly positive popularity. At least three areas of increasing demand are driving the price rise of ETH: decentralized finance (DeFi), staking Ethereum 2.0 and a newly formed ETH futures market focusing on this institution. Chicago Mercantile Exchange (CME).

Often compared to oil, ETH powers the Ethereum blockchain. The network is best known for hosting numerous DeFi applications such as loan markets, transactions and prediction. Ethereum-based applications create a natural utility for ETH because this cryptocurrency is required to settle transactions. DeFi coins have followed ETH’s jump as shown by the DeFi Momentum Index (DPI), up 83% over the past 30 days, according to Index Coop.

Staking on the Ethereum 2.0 network is also creating a shock in the supply of support for digital assets. ETH 2.0 is an ongoing redesign of the Ethereum network based on a new consensus mechanism known as PoS and database analysis. Approximately 2.7% of all $ 6 billion worth of ETH has been deposited into the ETH 2.0 blockchain. Those funds will be locked for about the next 12 months.

Finally, large investors like hedge funds may be interested in cryptocurrency exposure. CME launched a futures contract that can be cashed out for the digital asset on Feb. 8. The contracts surpassed a total volume of $ 160 billion in the first week. Since CME is one of the oldest and most trusted exchanges in the United States, the launch of contracts there could signal increasing institutional acceptance of ETH.

Prepare for a major uptrend

The second largest digital asset is fueled by a host of positive fundamental developments including the successful launch of ETH futures on CME and increased institutional demand.

Analysts from Fundstrat Global Advisors LLC say that ETH is preparing for a massive uptrend that will ultimately push the price of the token above $ 10,000.

The report indicates that the booming decentralized finance (DeFi) industry will be instrumental for the strong growth of ETH, as the majority of DeFi projects are built on top of the Ethereum blockchain.

In addition, the emerging non-fungible token (NFT) industry is also fueling the growth of ETH. Total transaction value in the NFT sector has grown by nearly 300% by 2020 and this trend will continue.

According to a study conducted by NonFungible.com and the foresight company L’Atelier BNP Paribas, the industry will become the main driver of the virtual economy by 2021.

The crypto market is on fire as the first digital currency BTC hit a new ATH above $ 56,000 on Feb. 19, while its market value surpassed $ 1 trillion for the first time in history. la.

ETH launches on CME with $ 55 million OI futures

ETH is trading for under $ 1,800 after following Bitcoin’s upward trajectory to all-time highs. Part of the positive movement and momentum has been created by the introduction of ETH futures on the Chicago Mercantile Exchange, also known as the CME Group.

During the launch week, the open contract (OI) of the futures contracts totaled $ 55 million.

ETH futures contracts launched on CME Group, OI surged to $ 55 million in the first week
Unlike the Bitcoin launch on the CME Group futures trading platform, the ETH rollout raked in $ 55 million in just the first few days.

CME Group added ETH futures on Feb. 8 to provide institutional traders with exposure to more assets besides Bitcoin. ETH is the second largest cryptocurrency by market cap and the next logical choice.

OI ETH futures | Source: Skew Analytics, Arcane Research

ETH is also among the few cryptocurrency assets that have regulatory support thanks to a fully decentralized, guaranteed distribution model.

Trading volume itself is relatively stable at around $ 35 million, but OI continues to rise from its launch week, according to the most recent Arcane Research report.

Similarities between ETH and Bitcoin at launch on CME

First week trading volume and OI results show a positive correlation with the larger cryptocurrency market trend. However, after rising for the first few days in the course of trading, ETH price has fallen from its recent record levels.

However, this should not be alarming, as when Bitcoin was introduced on the CME for futures trading on December 17, 2017, it was exactly the top of the bull market.

This is not the case at the moment, as evidenced by the fact that the ETH price is still up from its initial launch and that the larger uptrend has not reached the level of exhaustion at the end of 2017.

BTC and ETH prices at the launch of futures on CME | Source: TradingView

According to most reviews, Bitcoin’s ascent is only just beginning, and with the strike price for ETH options at $ 10,000 or more, it doesn’t seem like a peak for ETH at the moment. .

Can ETH do what even Bitcoin cannot and overcome the sudden emergence of short sellers in the market? Or will this mark the same temporary vertex as last time?