The Ethereum price is up over 50% since the start of the year, which is really impressive considering the market crash triggered by the coronavirus lockdown.
The Ethereum network has some solid fundamentals shining through, that signals ETH could be set for more upwards movement.
With an increasing number of projects being developed on the Etheruem network, serious accredited investors highly interested in it, partnerships with major banks, and an ever blooming DeFi space, it could be time for Ethereum to let the shackles of the last two years go.
Here are 3 signals Ethereum’s time is coming…
ConsenSys and JP Morgan Merger
An announcement of a merger between Ethereum-based software developer Consensys and JP Moragn’s blokchain arm Quorum recently rocked the blockchain space.
Quorum is a blockchain-based network, built on Ethereum, and it currently serves JPM’s decentralized network of more than 300 banks and financial institutions. JP Morgan’s stablecoin JPM Coin will also be built on Quorum, meaning all transactions will be handled on the Ethereum blockchain.
What’s more, with Quorum already utilizing the Ethereum network, it’s expected that JP Morgan will push many of its existing clients to start making use of its blockchain system.
As well as it being an exciting merger for Ethereum, it’s also a very smart move by JP Morgan. By merging with Ethereum’s closest software ally, JP Morgan has been able to pick the brains of Ethereum co-founder Joseph Lubin.
Banks might be the anti-christ of many in the crypto space, but the truth is blockchain and the financial system will need to merge, and by forming links with one of the most powerful banks in the world, it’s a masterstroke for Ethereum.
DeFi Market Cap Tops $1 Billion
The market cap of the decentralized finance (DeFi) space has topped $1 billion.
DeFi is a blockchain-based digital-assets financial services in which all applications built within the infrastructure utilize smart contracts, and dApss, and is mostly built on Ethereum.
Things such as lending and borrowing are part of the new finanical industry, and in little over a year it has grown from $275 million to over $1 billion, and more than $600m of it is in Maker DAO’s DAI stablecoin.
On top of that, there’s also over $150m worth of ETH locked up into Synthetix, a cryptocurrency derivatives protocol. While, leading ETH-based lending protocol Compound currently has about $125m locked up in its protocol.
According to Kin Warwick, the founder of Synthetix, ‘people are starting to understand the benefits of having finance applications on a decentralized platform.’ And few could argue with him with the amount of money locked up in the DeFi space.
Accredited Investors Paying a Premium
The Grayscale Ethereum Trust (ETHE Trust) is growing at a fantastic rate and with $267m invested in it, it seems likely it will continue to grow.
ETHE Trust is an important link to legacy investors wanting to sample Ethereum without actually buying ETH themselves.
It’s targeted at investors willing to pay more for regulatory oversight and to avoid risk of handling cryptocurrencies themselves, and a minimum investment of $25,000 is required to open an account.
Each share in the ETHE Trust is trading for $95.50, and each share only represents about $19.54 of an ETH, meaning they’re paying just short of a 500% premium.
Why would they do that, I hear you ask? Well, they trust Grayscale, and they also have faith in the future of Ethereum as a product.
Although things are looking up for Ethereum, it’s not a confirmation of a rise in value. There are serious contenders getting involved with Ethereum, and this is emphasized in all three reasons mentioned.
But markets are irrational, and anyone thinking short term, could get burned. However, with so much interest, it’s hard to see anything but long term gains for Ethereum, but don’t take that as financial advice.
The main thing is the Ethereum eco-system is growing at a rapid pace. The fundamentals are there, and I can only see more institutional interest coming.
Author: Tommy Limpitlaw