Why Ethereum has a Chance to Blow Up Even Bigger & May Even Trump Bitcoin

Ether is simply refusing to take a breather as the price surpasses $4,000 to hit yet another all-time high at $4,175 on Coinbase.

US-based cryptocurrency exchange Coinbase has been recording a premium on ETH prices ever since December 2020, when the parabolic run of ETH first started taking place and reached an ATH of $110 last week. This suggests it is the US institutional investors behind this ETH rally, says Ki Young Ju of CryptoQuant.

“Every single investor I have spoken to is shifting allocation to ETH over BTC. All our mutual friends and that billionaire finance circle,” shared Raoul Pal, founder, and CEO of Global Macro Investor and Real Vision Group.

The same interest can be seen with several Ethereum vehicles coming to market institutions. As we reported, VanEck has filed for the first Ether ETF in the US while many are already trading on TSX.

With this latest move, about 56% of traders are now short on ETH, as per Bybt data. While the funding has started to pick up too finally, the highest Ether perpetual futures is still only 0.15% on BitMEX.

The search volume for Ethereum on Google has also been running hot to new highs showing increasing retail interest in the cryptocurrency so much so that Binance has “temporarily suspended” the withdrawals.

The ETH balance of exchanges continues to dwindle, hitting a two-year low in favor of moving the coins to cold storage or putting them to work — 10.2 million ETH are currently locked in DeFi, and almost 4.43 million ETH are in ETH 2.0 deposit contracts.

Bigger than Bitcoin?

While in USD terms, there is clear space above to run for Ether, in terms of BTC, reaching 0.07150 BTC, ETH is nearing resistance in the range 0.07 and 0.085, so we might see a pullback here.

ETH may encounter some resistance around current levels, but the market is increasingly getting bullish on the digital asset and believe it can turn out to be more beneficial for the masses than Bitcoin and flip BTC while at it.

“As a liquidity bloodline powering other crypto assets, ETH is what BTC used to be,” said Chris Burniske of Placeholder VC. “Through the commodity theory of money lens, ETH is #1,” he added.

He notes how in the early days, crypto-assets were traded in BTC terms, but with the rise of stablecoins and more regulated exchanges, BTC has lost its share in this use case. Now, it is Ethereum that is powering financial and creative economies, settling twice the daily value as BTC.

“The primary reason: it’s where transitions happen, and therefore it’s the asset in which other stuff is denominated. It’s one side of almost every pair trade. It’s what you use to buy NFTs. It’s the asset which is locked fuel for Defi applications,” agrees Patrick O'Shaughnessy.

#2: Ethereum settles $30.5 billion worth of value per day, far more than Bitcoin and every other blockchain — to put this into context, PayPal settles ~$2.5 billion daily. pic.twitter.com/DO1ODeTMLz

— Spencer Noon 🕛 (@spencernoon) April 30, 2021

At its current valuation of about $472 billion, Ethereum has reached the level Bitcoin saw at the peak of the 2017 bull run. Currently, with $690 billion in total assets stored on Ethereum, it has reached 60% of the way to surpassing Bitcoin.

“The reason eth has a chance to blow up even bigger is that we have yet to really see business applications built on eth Smart Contracts start to happen. When they do, every company will be eth literate which will change the game. But L2s will have an important role to play too,” is Mark Cuban’s opinion on Ethereum becoming much bigger.