Ethereum, the native crypto currency of the Ethereum blockchain and the second largest overall, hit a new all-time high on Monday when it touched $ 4,162.
ETH has become in the last week the protagonist of the market. While bitcoin (BTC) continues to fail to break above $ 60K, the benchmark altcoin continues to move forward with a year-to-date performance at roughly 435%, up from 104% for bitcoin.
According to analysts, the gains seen this year by ETH have been driven by speculation from new market participants who are betting on so-called decentralized finance, or DeFi, basically, blockchain-based trading and lending platforms that aim to automate many functions of banks and other traditional financial firms. The Ethereum blockchain serves as the foundation for much of DeFi, and is also the foundation for many non-fungible tokens, or NFTs, another hot trend in the crypto currency markets.
With a market capitalization of about $ 470 billion, Ether is already close to the market valuation of JPMorgn Chase, the largest US bank, which boasts a Market Cap of $ 488 billion.
Moreover, experts see another reason for the rise of ETH in the emergence of an additional excitement in the ethereum plan for change towards a consensus mechanism “proof of participation” or proof-of-stake, English, -how transactions on the network are confirmed-, which theoretically will consume less energy and be more scalable than the current “proof-of-work”, which is similar to the one used by the Bitcoin blockchain.