It’s Time for ETH’s Price Discovery; Institutional Investors are Coming in 2021
It’s time for Ether to shine, the writing is on the wall. This means it’s time for the altcoin party as well.
Over the holiday weekend, Bitcoin went crazy, breaking into several all-time highs before topping out, for now, at about $28,230.
Now it's time for the second-largest cryptocurrency with a market cap of over $81 billion to show some moves.
ETH actually broke above the $700 level, a level last seen in May 2018. Going as high as $725, as of writing, Ether is surging on the back of the strong volume.
For the first time in 952 days, ETH price surpassed the $700 mark and at current prices puts more than 90% of the addresses currently holding ETH in a state of profit.
This is the highest amount of ETH holders that are in profit since January 2019. During the March sell-off, only 3.2% of all ETH addresses were in profit.
“Thinking ETH should outperform sharply next few days *if* BTC doesn't sh*t the bed,” said trader and economist Alex Kruger.
$ETH ON ITS WAY TO MARS.
— Wolf 🐺 (@IamCryptoWolf) December 28, 2020
ETH is actually flowing out of centralized exchanges, which is good for the prices. Even if these ETH go to DEX, for dumping by whales, that would be good for the market as “DEX drives Defi growth,” noted Ki-Young Ju of Crypto Quant.
ETH getting sent also means altcoins will start their uptrend too. “ETH in price discovery is good for alts. It's party time,” said Kruger.
Total cryptocurrency market cap is actually at resistance at its all-time high and if $692 billion holds, the next move will take us to new highs. And if not, $550 and $450 billion are levels to watch which, as per trader Michaël van de Poppe, are “buy dip opportunities.”
“Writing on the Wall”
Amidst ETH’s bull trend, DTC Capital's Spencer Noon predicted that in 2021 a fund manager of a publicly traded vehicle, someone like Cathie Wood, CEO, and CIO at ARKinvest, will add ETHE to its portfolio. He added,
“For Wall St, $ETHE is the only credible asset to add alongside $GBTC, and given the macro/asset class outlook, the risk-reward here is comically obvious.”
Trader Kruger shared a contrarian view, “The upcoming CME futures will be a game-changer.”
Earlier this month, CME announced that after the success of Bitcoin futures, they are all set to launch the Ether futures in February.
According to Kruger, ETH will not only “catch up with BTC in 2021” but outperform Bitcoin after the launch of its futures contracts on the biggest regulated derivatives platform which represents institutional demand. He added,
“It's about institutional investors buying into bitcoin as digital gold. Wait until they learn about ethereum and the CME gives them the vehicle to get long.”
Already, in 2020, ETH has started getting the attention of institutions through Grayscale, which holds 2.94 million ETH, representing 2.58% of Ethereum’s total circulating supply.
According to Ryan Watkins of Messari, “In 2021 we begin seeing institutions buy $ETH.”
This is because CME's ETH futures launch is “writing on the wall.” “They wouldn’t launch an ETH product if there wasn’t any demand for it,” he said.
And with institutions turning to Ethereum, it won’t be long that DeFi gets their attention as well. But according to Kruger, it might not happen next year as the decentralized finance sector needs more regulatory clarity. Kruger said,
“Institutional investors will eventually turns their eyes to DeFi. Not just yet. But it's a matter of when not if. Prices will then go up so much, you will all be in disbelief.”