The influx of the initial coin offering (ICO) boom in 2018 made Ethereum rally to a price high of around $1,430. Now, the demand for ETH is soaring again which could indicate a new rally and a potential yearly high in 2020 ahead of the ETH 2.0 launch.
As you probably know from our ETH news in 2018, ICO projects needed to raise money and ETH was the perfect way to do that. This is how the demand soared and Ether (ETH) reached its all-time high. Investors at the time began to speculate that they could multiply their Ethereum by trying their hand at early-stage crypto startups.
Now that ICOs are bust, one of the biggest demand drivers in the crypto world is gone. However, Avi Felman of BlockTower Capital recently told the cryptonews media that an all-time ETH may be coming soon, citing the unique and now-defunct dynamic which in 2018 pushed the price higher.
The ETH all time high price is likely a red herring, and was driven by a very specific dynamic (buy ETH to place in ICOs, no sell pressure because ICO treasuries didn’t think about that). BTC had no such dynamic. When BTC reaches its new ATH hard to see ETH anywhere near its ATH
— Avi IS RIGHT (@AviFelman) June 15, 2020
There are now five major factors that could drive the demand for ETH up, according to one top trader. As his recent Twitter thread shows, the confluence of reasons includes the following:
- DeFi services which are now getting more popular and could spike the demand for ETH.
- The ICO boom which is not the only driver for the price and demand for Ethereum.
- ETH 2.0 which is seen as a radical improvement that could “make every blockchain redundant” and cause a surge in demand for ETH.
- The gains of Ethereum which were muted in 2017 compared to other altcoins but could boom now.
Some points on why I think $ETH has not reached its peak when it comes to on-chain demand…
1) ICO mania was a relatively small bubble if we compare to the amount of activity on the chain currently
2) Defi services on ETH have gone parabolic without a mania, more than 2017? https://t.co/qU3072ugwW
— Cactus (@TheCryptoCactus) June 15, 2020
Obviously, not everyone is now convinced that investing in Ether (ETH) pays off. However, the news now show that catalysts driving positive price action may be bonafide. One of the analysts covering this thread is Michael Novogratz, the BTC bull who recently tweeted the following.
1. GLXY is a big investor in Ripple Labs. I would like to see them do well. @bgarlinghouse has done a great job as ceo. I commented the XRP tokens underperformed $btc last year because Ripple owns a lot of them. I have been almost solely long $btc for the past 15 months.
— Michael Novogratz (@novogratz) February 6, 2020
There are other prominent investors joining Twitter threads and shouting their opinions on the demand for ETH, how it is soaring and what it could mean in the future. Jeff Dorman, who is the CIO of Arca, recently said that because ETH is so closely correlated with Bitcoin and smaller altcoins now, investing in it is “useless.”
The price of Ether today is at $233 with a minimal decline but in a stable position overall.
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