Ether, the Ethereum (ETH) cryptocurrency, continues to break price records. In an uninterrupted wave of highs since December 2020, the digital currency has already surpassed bitcoin (BTC) in terms of the accumulated appreciation in the same period. From the end of last year until today, the crypto has already increased more than 330% and reached the historic US $ 1,761 this Friday (05).
Bitcoin lags behind in appreciation pace
Since its minimum price of $ 400 in December 2020, the value of ether has continued to increase. In the last 24 hours alone, the cryptocurrency has risen more than 10% and now exceeds the pace of appreciation of the market’s leading digital currency, bitcoin.
Even though it is still the cryptocurrency with the highest unit value and market capitalization, bitcoin has accumulated an appreciation of about 170% in the same period, from its minimum price of $ 14,000 in December to the current $ 38,000. The digital currency continues to rise steadily, but for multiple reasons ether now draws more attention from the market.
Launch of futures contracts boost ether
At the moment, ether is the subject of much speculation and is in the sights of major institutional investors in the face of the launch of futures contracts involving the cryptocurrency next week.
Futures contracts are a type of trading in the financial market. It is a commitment signed between two parties, in this case between brokerages or cryptocurrency funds and large companies. Thus, purchases or sales of the digital asset are established on a specific date and at a certain price.
The Chicago Mercantile Exchange (CME) will launch this trading format for the cryptocurrency on February 8. However, the effects are already being seen now, since institutional investors will have to negotiate the crypto more securely and increase their demand. Thus, market speculation soared and inflated the price of ether.
Bitcoin is scarce for institutional investors
As much as bitcoin is still the main cryptocurrency in the market, its demand does not match its availability. So-called “whales”, or large institutional investors, seek to buy crypto assets in large quantities, but these contracts have been difficult to close.
It turns out that bitcoin has also caught the attention of many retail investors, and so-called “holders” are already paralyzing 15% of all the world’s cryptocurrency supply. This type of strategy is based on buying an asset and holding it for long periods expecting huge future profits.
There are records of addresses that have not sold bitcoins for more than 7 years, as data from the Glassnode, platform for monitoring the cryptocurrency market, last Tuesday (02). As a consequence, the financial market giants turn to the ether that has the most liquidity.
Grayscale returns to negotiate ether
The world’s largest crypto asset manager, Grayscale, had stalled ether deals for new investors in December. But at the beginning of the month, the manager returned the cryptocurrency to its listing and accumulated about 25 thousand ETH in the first 24 hours. This has been directly impacting the demand for digital assets and has become another important factor for its appreciation in recent days.
Grayscale currently manages nearly 3 million ETHs that add up to more than $ 4.5 billion. The manager offers services mainly to large companies operating in the financial market.
With information: Business Insider