During the second half of 2020, we saw a developing interest in cryptocurrencies from institutional investors and big capital. However , all of the attention of the whales, along with all the attention of the community, was fixed on Bitcoin ( BTC ). Today, we will look at why Ether ( ETH ) is really a more attractive asset and why this cryptocurrency should end up being the “first cryptocurrency” for every trader.
Let’s start with the numbers: ETH’s growth since its March 2020 low after the coronavirus-induced market crash has been 1, 200%, whereas BTC has just grown around 700%. ETH’s growth since its 03 2020 low after the coronavirus-induced market crash has been 1, 200%, whereas BTC has only grown around 700%. Of course , against the backdrop associated with record highs for Bitcoin, whose price reached $ 40, 000 , the rise of Ether to $1, 400 will not seem so impressive. Furthermore, the market capitalization of ETH is five times lower than the volume of the BTC marketplace. But what is more important for a good investor: nice numbers plus records of an asset from a portfolio or high earnings?
There are very strong good believe that Ether will continue to keep rise in price in 2021 and bring more profit to investors than the “most famous cryptocurrency, ” Bitcoin.
Demand among developers
Ethereum is the number-one platform for building blockchain projects and launching decentralized applications. The chart beneath displays the number of unique ERC-20 tokens traded during the first years since the launch from the Ethereum network. And even though the rate of expansion of the market for blockchain online companies has slowed down since the initial coin offering bubble burst in 2018, their total number is still growing.
And even despite the fact that Ethereum has serious competition — such as Tron, Polkadot, Cardano, Cosmos and Tezos — Vitalik Buterin’s cryptocurrency platform continues to be a leader in this particular direction.
Developing transaction volume
During 2020, more than $1 trillion worth of dealings were recorded on the Ethereum blockchain. These figures surpass the transaction volume of payments giants like PayPal, which is often used by over 350 million users and has with typical volumes that do not generally exceed $200 billion per quarter.
Also, remember that each transaction generates system fees paid in ETH. And since the network’s growth rates are still high, we can confidently expect the extension of the “bullish” trend associated with ETH. In any case, interest in cryptocurrency is increasing, as is the number of active wallets, the number of transactions on the network and the average transaction size.
Development of the DeFi industry
Despite Bitcoin’s leadership in the cryptocurrency market, Ethereum remains the leader of the young decentralized finance sector. Highly popular in the summer of 2020, DeFi lending plus staking projects continue to develop, attracting new investments.
The total value locked in decentralized finance because the beginning of 2020 has grown nearly 3, 300%, through $687 million to $23. 2 billion. And it is Ethereum that is the main platform for your creation and launch on most new DeFi projects and stablecoins.
The particular emission of stablecoins is constantly growing, as digital assets backed by the value of less-volatile fiat currencies are a pretty convenient tool for quick settlements between users, just for forming trading pairs on crypto exchanges and for preserving capital from high volatility in your crypto wallet.
Separately, we should talk about the interest of institutional investors in decentralized finance. While the disorder in the DeFi market almost eroded institutional confidence within the potential of blockchain in the financial sector in the summer of 2020, public companies continue to keep show interest in the new resource type.
Inside August 2020, Archax and Algorand exposed plans to develop tools for introducing DeFi among institutions. And in the fall of 2020, it became known that xSigma, an additional of the Nasdaq-traded ZK Global, is working on the development of DeFi services and is preparing to launch a decentralized exchange with regard to trading stablecoins.
We all remember what big investors’ attention to Bitcoin led to last year, right? Now, this looks like other areas of the cryptocurrency industry are in for the same, and a few of them are directly associated with Ethereum. And the main benefit of Ethereum lies in the versatility of its technology and its growing community.
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The sights, thoughts and opinions expressed here are the particular author’s alone and do not necessarily reflect or represent the particular views and opinions of Cointelegraph.
Nick Bel is a cryptocurrency enthusiast and tech author based in London. He is passionate about finance and emerging technologies, such as blockchain, cryptocurrency plus artificial intelligence.