Ethereum’s price rallies as institutional demand for the altcoin heats up

Posted: 27 September 2021 2:28 am
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Ethereum’s 12-month gains currently stand at an impressive 785%.

  • JPMorgan’s crypto research wing believes Ethereum’s ongoing rise is fueled by the growth of the DeFi and NFT markets primarily.
  • Ethereum (ETH) reserves across centralized exchanges have continued to plummet to new lows throughout 2021.
  • Ethereum rivals such as Solana and Fantom have continued to gain traction, with both projects registering gains of +200% over the past month alone.

Ethereum (ETH) scared investors worldwide by slipping as low as $2,600 earlier this week. But the world’s second-largest cryptocurrency by market capitalization is now in full recovery mode, currently up by 10% over the last 24-hour trade window. At press time, ETH is trading at $2,861.

A few factors are fueling Ethereum’s ongoing price action. A recent bullish report from JPMorgan & Chase claims that the last few weeks have seen a growing list of institutional investors increase their exposure to Ethereum markets.

The banking giant’s crypto-analysis team believes the rise of the decentralized finance (DeFi) sector and the non-fungible token (NFT) market have helped Ethereum immensely. The altcoin’s 21-day average Futures premium recently climbing to 1% over spot ETH prices, signaling growing mainstream demand for the asset.

Also, net ETH reserves across all major trading platforms (i.e. CeFi exchanges) have continued to drop, with the said number plunging to 18.44 million ETH recently. This figure lay at 23.94 million ETH exactly a year ago.

How to buy Ethereum

Ethereum alternatives continue to gain traction

Thanks to Ethereum’s seemingly never-ending gas fee woes, an increase of ETH alternatives (offering low cross-chain transfer fees) have gained traction with each passing day. The value of various L1 and L2-based tokens have been rising, made evident from their growing total value locked (TVL).

More and more devs are making use of ETH alternatives that offer a higher degree of scalability, efficiency and transaction throughput. For example, over the last month, projects like Solana (SOL) and Fantom (FTM) have seen their values surge by more than 200%.

DEXs see their trade volumes rise amid China’s latest ban

Popular decentralized derivatives exchange (DEX) dYdX saw a massive surge in its daily trade activity yesterday, especially as the Chinese government issued a fresh new circular asking local regulatory authorities to crack down on any crypto transactions taking place within the country. dYdX is now processing more digital currency transfers on a daily basis when compared with Coinbase, one of the most prominent crypto exchanges in the world today.

Statistically speaking, since yesterday, dYdX has processed trades worth more than $4.3 billion, a figure that is nearly 15% higher when compared with Coinbase’s daily volume of $3.7 billion.

Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.

Disclosure: The author owns a range of cryptocurrencies at the time of writing

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