A performance of more than 300%, the launch of Ethereum 2.0 and several improvements implemented are some of the reasons that are elevating Ethereum to investors, who are beginning to set their sights on this asset and all its potential.
Ethereum, The second cryptocurrency most important of the digital markets by capitalization, is awakening a greater level of interest among potential investors. The most well-known and used network for creating decentralized applications (dApps), smart contracts (smart contracts) and decentralized finance protocols (DeFi) has experienced a great year in 2020, attracting the attention of many potential investors.
This cryptocurrency has had great technological advances in 2020, but it has also seen exponential growth in its value within the markets, so Michael Sonnenshein, managing director of Grayscale Investments LLC, the market-leading American fund and investment management company, considers that it is becoming a potential asset for investment.
Sonnenshein pointed out during a interview Bloomberg that investor interest in Ethereum this year has grown significantly and that there are even those who are only focusing on investing in Ethereum (ETH), or if they prefer this cryptocurrency first, even above Bitcoin (BTC).
Grayscale has Grayscale Ethereum Trust, a publicly traded product in the United States that allows advisors and investors to have exposure to the appreciation and revaluation potential of the cryptocurrency, without the need to purchase, store and custody ETH directly.
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Trust grows for Ethereum (ETH)
For the managing director of the fund manager and investors, investor confidence in ETH is growing, so a fairly close competition could begin between Bitcoin and Ethereum as investment assets. While Sonnenshein noted that Bitcoin has remained the preferred investment asset for investors this year, he also highlighted that Ethereum is gaining a better footing as an asset class.
“Over the course of 2020, we are seeing a new group of investors who are Ethereum first and, in some cases, Ethereum only. “There is growing conviction around Ethereum as an asset class.”
Likewise, the Bloomberg Intelligence expert strategist, Mike McGlone, also noted that the exponential and surprising growth in the value of Ethereum is one of the main reasons behind the increase in interest and confidence in this asset. McGlone revealed that Bitcoin has seen a 170% price rise this year, but Ethereum nearly doubled that value with an incredible 360% growth this 2020. In addition, of course, other factors such as the rise of DeFi, the launch of Ethereum 2.0, and various improvements implemented in the ETH ecosystem are increasing the potential of the cryptocurrency and making it gain greater attractiveness among investors.
DeFi, building the value of ETH
McGlone suggests that the popularity of DeFi ecosystems is partly due to the number of users and investors who are locking their ETH cryptocurrencies within these platforms, considering that the majority of DeFi projects are based on blockchain from Ethereum.
The DeFi sector experienced exponential and accelerated growth in 2020, going from having liquidity close to $1 billion for the month of June to more than $14,7 billion at the time of this publication, according to the data provider DeFiPulse. In this growth, “Ethereum appears to be maintaining leadership status”says McGlone.
Growth in Grayscale Ethereum Trust shares
Bloomberg conducted an analysis on the number of outstanding shares held by Grayscale Ethereum Trust at the end of 2019 and compared it to the number of shares outstanding currently, revealing a growth of over 496% to date, which translates to over 180 million dollars in investments.
“Grayscale Ethereum Trust has 29,6 million shares outstanding compared to 5,2 million at the end of 2019… Inflows went from $20,1 million in Q2019 204,1 to $2020 million in Q17. quarter of XNUMX. And in the third quarter, more than XNUMX% of inflows into Grayscale Ethereum Trust came from new institutional investors.”
Grayscale Ethereum Trust is the company's second most used cryptocurrency fund, which according to a report published on November 30, managed ETH under its management worth $1,58 billion during that month.
Ethereum's promise of scalability, security and privacy
It is not for nothing that the launch of Ethereum 2.0 was one of the most anticipated updates in the crypto community for some years. The update > , also known as Ethereum 2.0 or ETH 2.0, is the promise of greater scalability and security in the network, which will allow thousands of transactions per second (TPS) to be processed compared to the scarce 30 TPS that the network can process today.
The transition from Ethereum to Ethereum 2.0 will make the network more sustainable, faster, and secure. And although this update officially began on December 1 of this year, it will be completed, according to its developers' estimates, within approximately 2 years.
On the other hand, other initiatives such as Secret Network, an Ethereum-based network to improve the privacy of this blockchain, recently announced the launch of Secret Ethereum Bridge, a secret Ethereum bridge that “brings the power of programmable privacy to ETH and ERC-20 at low cost”, according to the official announcement.
Secret Network believes that the launch of this private bridge will not only improve the level of privacy for privacy-conscious users in Ethereum and DeFi applications, but also represents a major fundamental step towards building a much more open and global financial ecosystem. safe, accessible and usable.
“It remains a volatile asset”
Despite all the advantages and benefits that Ethereum currently offers, and that are favoring the growth of its value in the markets, Bloomberg remembers that it is still a volatile asset so a setback or correction in its price is something that can happen.
At press time, the value of ETH is $594 USD per unit and has a capitalization of 67,6 billion dollars. On the other hand, although ETH has seen more than 300% growth so far this year, the cryptocurrency is still below its high of $1.448 USD reached in January 2018.
Yesterday, this medium reported on the creation of the first exchange-traded fund (ETF) for Ethereum in the world. He launch This product was led by the investment company 3iQ Corp. The first Ethereum ETF is listed under the name QETH.U on the Toronto Stock Exchange (TSX), Canada.
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