The Rise of Ethereum (ETH)

Ethereum is, without a doubt, the second most popular and valuable cryptocurrency on the market today. It’s the second biggest cryptocurrency after Bitcoin. This is why many people consider it a worthwhile investment instrument. Many new technologies are being developed that use Ethereum, such as non-fungible tokens (NFTs) and decentralised applications (DApps).

However, what are the factors behind the rise of Ethereum?

Growth in Blockchain Technology
There’s growing adoption of blockchain technology worldwide. A Deloitte survey discovered that 40 percent of companies planned to invest at least 3 million pounds on blockchain initiatives in 2020.

This acceptance and investment indicate that blockchain technology has grown more trustworthy among people looking to enhance business systems or play casino games with a live dealer. Ethereum has established itself as the most popular cryptocurrency for such purposes due to its decentralised finance (DeFi) and scalability advantages.

Ability To Use With Other Cryptocurrencies
It’s possible to use Ethereum with other cryptocurrencies because it’s compatible with most. When you send any cryptocurrency directly from one wallet, only the Ethereum coin is required. This means that many crypto holders keep their crypto in exchanges and use Ethereum to send it to another wallet.

Gas Fee
Ethereum is valuable because you need to pay a gas fee or transaction fee whenever you send it to someone. When sending ERC-20 tokens, the gas fee applies, and the transactor must also keep ETH in the same wallet to cover the transaction cost. In addition, when trading on decentralised exchanges (DEXs), the gas fee applies.

As a result, many people invest in Ethereum for gas fees. Additionally, this is why the cryptocurrency has a base level demand in the crypto market. When you look at the numbers, Ethereum’s network was bustling in 2020, when the crypto sector experienced a DeFi boom. As a consequence, the Ethereum network earned a significant gas fee.

Institutional Interest
More institutions are becoming interested in cryptocurrency, which is boosting demand. Some people see crypto as a hedge against inflation in the future during the current macro environment. Ethereum’s core developer team is also working hard on Ethereum 2.0, developing scaling solutions for this blockchain-based platform. Consequently, when it starts to work, the ETH value will increase.

Regulation of the Futures Market
Cryptocurrency is becoming more and more popular. Institutions that include it in their portfolios need to find a safe place to manage the risk. They also need the ability to see the prices and have liquidity. Institutional investors will have access to a regulated market to get exposure to price movements.

There’s no need to deal with the digital asset or concerns about wallets, custodians, insurance or other entry barriers. The Ethereum contract allows people to invest in and trade cryptocurrencies and manage any associated risks.

As you can see, Ethereum is one of the most stable cryptocurrencies on the market. Investors might want to pay attention to it because the ETH value will continue to increase over time.