Why many ‘investors consider Ethereum a proxy for the altcoin market’
Ethereum’s price had risen by more than 24 percent when compared to last week. At press time, the coin was trading well above the $3900 mark, having registered an ATH above 4000 a day ago. The largest alt’s market cap was also over $4 billion – another record it recently inscribed.
Highlighting the position ETH holds in the market, Joshua Frank, CEO of The Tie, a crypto-centric data company, recently told CoinTelegraph,
“Many investors consider Ethereum a proxy for the alt-coin market… Tweet volume over 24 hours recorded an incredible 59,000 as ETH continues to push all-time highs.”
The number of Ethereum transactions recently touched an ATH of 60,471.357. The alt’s previous high of 60,456.726 was witnessed more than a fortnight ago, on 23 April.
Ethereum’s rally started picking up pace post its Berlin upgrade that took place on 15 April. Alongside, the rising popularity of digital collectibles and DeFi have also fairly contributed to ETH’s price surge. Shedding light on the same, managing director of Binance X, Flora Sun contended,
“There’s a lot of innovation in DeFi protocols these days. DeFi still offers a much higher yield than traditional finance, so naturally, it is attracting a lot of crypto liquidity.”
A low balance of ETH on exchanges means a bullish sign for the alt as it would translate to a reduction in supply, thereby providing an additional bullish catalyst for the altcoin.
📉 #Ethereum $ETH Balance on Exchanges just reached a 23-month low of 13,384,235.936 ETH
View metric:https://t.co/1dCpD2ey8E pic.twitter.com/FGZHqXr3Pa
— glassnode alerts (@glassnodealerts) May 10, 2021
Ethereum’s EIP-1559 development and the London hard fork that’s set to follow in July this year would also potentially impact the alt’s price. Underlining the same, Eric Anziani, chief operating officer of cryptocurrency exchange Crypto.com, said,
“This upgrade will begin burning transaction fees, naturally reducing Ethereum’s rate of inflation. If network usage is high enough, Ethereum may even become deflationary. This is a highly bullish development that the market has just begun to price in.”
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