Ether prices continued their impressive rally today, breaking above the $ 3,500 level to a new all-time high.
According to data from CoinDesk, the second largest digital currency in the world in terms of market value reached as high as $ 3,530.39 today.
At this point, the cryptocurrency has grown almost 380% since the start of 2021 to less than $ 750, additional figures from CoinDesk reveal.
Digital assets had declined somewhat at the time of writing, but they were still trading above $ 3,300, having climbed over 300% since the start of this year.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
To explain what drove Ether’s latest gains, crypto analysts pointed out several different variables.
One factor that many market watchers have identified as being able to fuel the recent rise in ether is Fear of Missing Out (FOMO).
Martin Gaspar, research analyst at CrossTower, spoke about it, saying that:
“There appears to be some FOMO, which is reflected in ETH’s RSI indicating overbought levels (ETH’s RSI at the time of this article was 80).”
John Iadeluca, founder and CEO of multi-strategy fund Banz Capital, also weighed in, noting that “the $ 3,000 price point has long been a key area of resistance for Ethereum.”
“The current price breakout above this level indicates an increase in FOMO in institutional and commercial investments,” he said.
Marc Bernegger, board member of Crypto Finance Group, also offered a perspective:
“I see quite a few bigger investors reallocating some of their Bitcoin exposure to Ether, which is definitely FOMO behavior,” he said.
In explaining the recent Ether rally, market watchers also pointed out the changes that have occurred over a longer time frame, helping to increase the value of the digital asset.
Sean Rooney, head of research at Valkyrie Investments, spoke about these developments.
“The shift in demand for ether relative to bitcoin has occurred regularly throughout the year as Ethereum moves closer to implementing a proof of stake consensus mechanism,” said he declared.
“Lower fees and higher transaction throughput are certainly one reason investors interested in DeFi have their skin in the game as summer approaches.”
Gaspar also commented on these questions, noting that:
“Many investors are just finding out about the EIP-1559, scheduled for July, and how it could lead to Ethereum tokenomics deflationary.”
“In other words, more ETH could be burnt from the transaction fees that new ETH produces on a daily basis, which could lead to a decrease in the supply of ETH and an increase in the price of ETH. “
Growing adoption of Ethereum
Several analysts have also pointed out the growing use of Ethereum and how this could put upward pressure on the price of Ether, its native token.
“Institutional involvement in ETH is inevitable,” said William Noble, chief technical analyst at the Token Metrics research platform.
“ETH has a better use case,” he said, and for this reason, “investors may start to see ETH as a better store of value than BTC.”
Collin Plume, President and CEO of Noble Gold Investments, also intervened.
“Ethereum is the most widely used blockchain, from JP Morgan to Mastercard,” Plume said. “Even NFTs are in Ethereum.”
“What makes the price of Ethereum is the actual use, demand and need. Ethereum is the perfect demonstration of why we need blockchain. “
Disclosure: I own bitcoin, bitcoin cash, litecoin, ether, and EOS.