ETH remains one of the most liquid coins, with its own wide selection of trading pairs and dedicated exchanges.
Ethereum (ETH) moved in unison with Bitcoin (BTC), as the leading coin broke the $11,200 barrier for the first time in more than a year. Usually, a rising BTC would push down ETH, but this time around, there are indicators for optimists that see the second largest coin move to more significant valuations.
ETH traded at $307.47 as of 9:45 UTC on Monday, moving up more than 300% since the lows of $92 in December 2018. Now, ETH has a long way to go to its heights, as it trades at around 0.028 BTC. Here are the five factors to boost the price of ETH:
ETH is the coin that sees the biggest inflows of funds, both from Bitcoin (BTC) and Tether (USDT). From the BTC markets, more than $1 billion’s equivalent flow into ETH, which is a ramp for a larger array of altcoins. Another $1.14 billion’s equivalent flow in from Tether (USDT) markets. Thus, ETH is much more than a “utility coin” for the Ethereum network, and its market price reveals the coin is actually central to the system of exchanges. To compare, other “utility coins” for networks similar to Ethereum are commanding a much lower price – and are not included in base pairs.
Additionally, the supply of Ethereum-based USDT is growing, to just above 1 billion coins. With dedicated ETH-based printings of USDT, the coin may be on a path similar to BTC, through a direct boost related to Tether’s liquidity injections.
ETH remains undervalued, especially in BTC prices. Since altcoins go through cycles, ETH may not be an exception. ETH is near its lower range against BTC, down from a peak of 0.15 BTC. But in the past, ETH has moved up from lows of 0.005 BTC. Now, the triggering of an altcoin season may come from ETH, as it grows an independent market against stablecoins.
The arrival of staking in 2020 may boost the price of ETH, as users may attempt to lock in small-scale nodes. Even staking 3-5 ETH may become a serious challenge, and larger nodes may further decrease the supply of coins. Staking may lock additional coins, in addition to the slower creation of ETH at the rate of 2 coins per block.
No More ICOs
The ICO season has passed, and some of the sales pressures from projects aiming to finance their operations may have dissipated. IEOs, or token sales based on exchanges, do not use ETH for the event, and rely on other altcoins. At this point, ICO projects are not creating sales pressures, at least at these lower prices. Some of the largest ICOs may also be using ETH to boost the positions of their coins, instead of liquidating.
The Ethereum network habitually carries more than 800,000 transactions per day, based on Blocktivity data. Gas prices also remain robust, and usage on the ETH network seems to be growing gradually. Despite the somewhat stagnant mining, Ethereum’s network sees robust usage with the arrival of new wallets, which allow for running distributed apps in a more direct manner.
In case BTC prices stagnate and take a longer time for another rally, this may trigger the rise of ETH as an alternative for robust growth. ETH has only reached around $1,,400 at its peak, and its role as a base pair coin may see the asset climb to higher valuations, especially if volumes and liquidity continue to deepen.
ETH, along with LTC, has established itself as one of the large coins that also offer robust growth in 2019. While the coin remains unpredictable, ETH seems to be out of the woods, losing some of the earlier criticisms and pessimism.
Neither the author nor the publication assumes any responsibility or liability for any investments, profits, or losses made as a result of this information. Cryptocurrency trading and investing are risky propositions, and market participants are advised to always conduct thorough research.