The price of Ethereum (ETH) has risen above $ 2,000 with strong momentum with little ground on Bitcoin (BTC) in the last 24 hours.
p>According to Quinn Telegraph, there are three main reasons behind the explosive rise of Ethereum, which are the rapid growth of decentralized financing, the hype over Ethereum after the listing of futures contracts on the CME, and the decline The amount of Bitcoin and Ethereum in the exchanges.
Listing of futures contracts on the Chicago Mercantile Exchange increases the institutional hype
Ethereum reached $ 2,000 for the first time ever after the release of Ethereum futures contracts on the Chicago Mercantile Exchange earlier this month, aimed primarily at institutional investors.
Before the listing, there was a common anecdote that listing on the Chicago Mercantile Exchange would cause Ethereum's price to drop dramatically, because the listing of Bitcoin futures contracts on the Chicago Mercantile Exchange in 2005 2017 coincided with the highest domestic level for Bitcoin at the time.
However, Ethereum has steadily risen since then, topping its all-time high and topping $ 2,000 on February 20. The new milestone indicates that there is currently a lot of institutional buzz around Ethereum, which is also evidenced by the resumption of the Ethereum Trust from Gayskill to purchase Ethereum in February.
The massive growth of decentralized finance
According to data from Dappradar.com, the total closed value (TVL) of the decentralized finance market is roughly $ 50 billion.
The term total value locked is used to measure the amount of capital locked in in each decentralized financing protocol. For example, if two billion dollars in a protocol were used to borrow or lend money, then that would mean that the total closed value of the protocol would be two billion dollars.
Ethereum directly benefits from the rising total closed value of the decentralized finance market because Ethereum is used as a way to pay transaction fees on the Ethereum blockchain network.
Thus, the greater the demand for decentralized financing protocols and services, the more they will benefit from the value of Ethereum in the market.
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