In the last two months of 2020, Bitcoin opened an upward channel. Unlike Bitcoin, Ethereum’s performance in the last two months of 2020 was unremarkable. On the first day of 2021, Ethereum seems to be waking up. Since January 1, 2021, Ethereum has risen by 70%, and on January 10, 2021, it touched the price high of January 14, 2018 three years ago, although it began to pull back after a short touch , but today, Ethereum looks to be higher than it was before the shock.
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1. Expensive Bitcoin makes new investors look to ETH
The price of Bitcoin has experienced an exponential rise in the last 3 months. At the time of writing, the price of Bitcoin has reached 35,500 US dollars. However, the game players are not very friendly. Most investors do not have so much money to buy a full Bitcoin, which may make investors feel abandoned by Bitcoin. If Bitcoin continues to rise, no matter for the new entry For investors or old players who have not established a Bitcoin position before, this sense of being abandoned will increase.
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2. Ethereum is about to follow BTC on the CME, and the investment of traditional investors will increase more possibilities
If you have been paying attention to traditional financial markets. You’ll find that over the past 12 months, the Chicago Mercantile Exchange’s (CME) Bitcoin (BTC) futures trading product has seen record volumes. As CME continues to increase its trading volume, according to data, the average daily trading volume (ADV) of Bitcoin in December reached 11,179 contracts (equivalent to 55,900 BTC), a year-on-year increase of 114%. In the past 3 months, it has continuously made history and created new highs. Founded in 1848, the Chicago Board of Trade is a leading futures and options exchange. In May 2020, it ranked 440th in the 2020 Forbes Global 2000 list.
According to the latest news, on February 8, 2021, the Chicago Mercantile Exchange (CME) officially launched Ethereum futures, and the decision is currently awaiting final review. With the previous successful experience of Bitcoin, the road to ETHs review will also pass with a high probability. Once it is successfully passed, the traditional financial market will completely open the door for Ethereum. Investors can invest in Ethereum without actually buying and storing Ethereum. In other words, it is as simple as buying gold on Alipay. Imagine if"new money"secondary title
3. The launch of ETH2.0 will attract more investors
ETH2.0 is an upgrade to the current Ethereum, and it needs to solve the scalability and cost issues of Ethereum. ETH2.0 is a PoS chain, which is two different chains from the current PoW chain of Ethereum 1.0, and the two will eventually merge in the future.
There is an impossible triangle theory in the blockchain network, that is, decentralization, scalability, and security cannot be satisfied at the same time, which requires a trade-off in network design. For example, Bitcoin satisfies decentralization and security, but sacrifices in scalability. ETH2.0 aims to improve scalability through sharding technology, greatly increase the throughput of the blockchain network, and improve the performance of the entire network operation. The simple understanding of the idea of sharding is to increase the number of pipelines and assign business orders to each pipeline, so that all pipelines can work in parallel, and the efficiency will be greatly improved. Similarly, ETH2.0 will enable 64 data shards (the number of subsequent shards may also increase), each shard chain only processes its own transaction information, and 64 shard chains run in parallel, which significantly improves the performance of poor throughput. status quo.
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4. Defi will provide strong impetus for ETH
In the strong rise of ETH in 2017, the price of Ethereum soared to more than 1400 US dollars. In that round of rise, 1co played a vital role. The white paper can be used to start financing. This model opened ETH to a crazy mode. Although the vast majority of ICO projects ended in failure, they did play an important role in that round of upward trend.
And the time has come to 2021. Looking back at 2020, we can see that DEFI is hot. Different from the risk of ICO, DEFI is a real financial behavior. DeFi is the abbreviation of Decentralized Finance (decentralized finance). Called Open Finance. It actually refers to a decentralized protocol used to build an open financial system, designed to allow anyone in the world to conduct financial activities anytime, anywhere.
Due to better scalability and operational compatibility, most of the DEFI in the market choose the ETH platform. According to the data, the total lock-up volume of DeFi on Ethereum has reached 30.5 billion US dollars, and due to the high compatibility of Ethereum , Only Ethereum has realized a complete ecosystem of lending, DEX, insurance, wealth management, etc.
With the arrival of ETH2.0, DEFI deployed on the ETH platform will no longer be subject to performance bottlenecks. In this way, the first choice of DEFI in the future market must be ETH2.0, and the DEFI ecology on ETH will surely become the markets core.
While wild swings in cryptocurrencies are quite frequent, it would be a mistake to completely ignore blockchain as the world continues to embrace blockchain technology and cryptocurrencies. The blockchain may be one of the most likely methods of wealth transfer in the near future of human history, and I still believe that 2021 may be the year with the best chance for ETH, and we may witness the greatest year in the history of cryptocurrencies.
