A halt in Bitcoin’s (BTC) upward march has shifted the focus to Ethereum (ETH) which surged past the $1,400 levels in the past 24-hours, briefly hitting a new all-time high.
What Happened: The second-largest cryptocurrency by market cap has been buoyed by an ecosystem of decentralized finance (DeFi).
General Partner at Variant, Spencer Noon, tweeted on Tuesday that there are more than 1.25 million DeFi users, a figure on the uptrend.
“Ethereum's biggest use case is on a path towards product-market fit,” said Noon.
#6: There is now more than $25 billion dollars locked in #DeFi, with 21 different projects having more than $100M TVL -- a sign that the ecosystem is maturing rapidly and becoming institutional-grade. pic.twitter.com/E7fT6QVc6e— Spencer Noon (@spencernoon) January 19, 2021
The analyst said that ETH continues to “dwarf the entire crypto space” in terms of fees paid, which now stands at a daily average of $7.25 million. Noon called ETH “the most useful network in the world.”
The enthusiasm for ETH hasn't been dampened — even by high fees — known as gas in ETH parlance.
The high amounts of gas, according to Jacob Franek, a partner at DeFi alliance, is a positive sign, reported Cointelegraph.
“It's the most direct measure of aggregate willingness to pay [demand] for block space. Ethereum has the most valuable block space in crypto now,” said Franek.
Meanwhile, the BTC-USD pair, which has remained rangebound, may see downwards movement, according to cryptocurrency trader Jonny Moe, according to Cointelegraph.
“Every time I start to convince myself to lean bullish, the longer I stare at this chart the more I start to get bearish again. I just really feel like this is going to breakdown and we close the weekly red, and I can't shake that off yet.”
Why It Matters: The lack of movement in BTC is leading to investors looking at other altcoins.
“Bitcoin has been in a range for the past few weeks, which gives time for capital to rotate” into other digital assets,” said Vijay Ayyar, head of business development at Luno, a Singaporean cryptocurrency exchange, Bloomberg reported.
ETH soared to $1,439.33 at around 12:00 UTC, exceeding the previous all-time high of $1,432.88 hit on Jan. 13, 2018, as per the CoinDesk price index.
On a YTD basis, ETH has returned 85.78%, while the apex cryptocurrency — BTC — has returned 20.24%.
At press time, ETH traded 3.38% higher at $1,369.51 while BTC traded 2.97% lower at $35,456.79.
The Grayscale Ethereum Trust ETHE closed 17.16% higher at $16.46 on Tuesday and the Grayscale Bitcoin Trust GBTC closed 3.27% lower at $38.06.
Top traders and exchanges are opening short positions in ETH thanks in part to high use of leveraged derivatives, Cointelegraph reported separately.
This could be construed as a signal that top traders are not bullish on ETH, as per Cointelegraph.
Visit Benzinga's Crypto Homepage - 1,000,000+ depend on Benzinga Crypto every month
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.