During the second half of 2020, Institutional investors and big money have become increasingly interested in cryptocurrencies, buying up digital currencies like Bitcoin to fend off inflation. Ethereum (ETH), by contrast, is a much more attractive asset that justifies being the "first cryptocurrency" for every investor.
ETH’s growth since its March 2020 low after the coronavirus-induced market crash has been 1,200%, whereas BTC has only grown around 700%. ETH’s growth since its March 2020 low after the coronavirus-induced market crash has been 1,200%, whereas BTC has only grown around 700%. Against the backdrop of record highs for Bitcoin, whose price reached $ 40,000, the rise of Ether to $1,400 does not seem so impressive, but its upside potential is even greater. The market capitalization of ETH is five times less than the volume of the BTC market by now. There are very strong reasons to believe that Ether will continue to 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. And despite the fact that the rate of expansion of the market for blockchain startups 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 competitors — such as Tron, Polkadot, Cardano, Cosmos and Tezos — Vitalik Buterin's cryptocurrency platform continues to be a leader in this direction.
Growing transaction volume
During 2020, more than $1 trillion worth of transactions were recorded on the Ethereum blockchain. These figures exceed the transaction volume of payments giants like PayPal, which is used by over 350 million users and has with average volumes that do not generally exceed $200 billion per quarter. Also, keep in mind that each transaction generates network fees paid in ETH. And since the network's growth rates are still high, we can confidently expect the continuation of the “bullish” trend of 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 sector
Despite Bitcoin's leadership in the cryptocurrency market, Ethereum remains the leader of the young decentralized finance industry. Highly popular in the summer of 2020, DeFi lending and staking projects continue to grow, attracting new investments. The total value locked in decentralized finance since the beginning of 2020 has grown nearly 3,300% from $687 million to $23.2 billion. And it is Ethereum that is the main platform for the creation and launch of most new DeFi projects and stablecoins.
The main advantage of Ethereum lies in the versatility of its technology and its growing community, making it a rare cryptocurrency asset for investors in 2021.