The beginning of 2021 so far was mostly about the incredible success of the bitcoin network. Despite a very lukewarm start of 2020 and then a massive tumble that the entire cryptocurrency domain saw in the March collapse, the main digital currencies were back in good shape just a few months later. The fact that the world was gripped by the height of the pandemic of COVID-19 coronavirus did not matter much to the crypto domain. Instead, all prices were slowly consolidating and some, like bitcoin, were shaping up into an incredibly strong position for a bull breakout.
For BTC token and its price, that moment came in late 2020 and then fully in January 2021. Now, the world is more than comfortable with the idea that one BTC token had a price tag of around 5,000 USD and that now the same price tag stands at around 37,000 USD. Yet, the rise of bitcoin overshadowed the success of the second-largest digital currency network, ethereum. But, the same space is, like bitcoin in mid-2020, gradually forming into a very serious contender for a huge breakout in terms of price and market cap. Here are the key reasons why ETH token is the one to watch in the coming days and weeks.
The price of ETH token was very meek during the main bull run of January 2021. That did include price gains throughout the month, but these remained well below the previous record of around 1,400 USD. Instead, the price managed to climb to around 60 percent of its 2017 record. Back then, the ICO mania was in full swing, and the ETH tokens were being bought by investors who were chasing the so-called new bitcoin. At that moment in the crypto market, there was a big sense that the key moment for purchasing bitcoin passed and that everyone, especially new investors, had to work on locating the new cryptocurrency network of the future.
That would include the dream rookie investment scenario where a person bought a large number of individual coins that would be attained for a very small price. The same tokens would then grow and grow in value, bringing about an exponential rise in the same investment. However, the same mania fizzled out as soon as the Crypto Winter of 2018 set in. However, the magnetic pull of the bitcoin bull run finally rubbed off on the ethereum network as well. Presently, it seems that February is going to be its months, especially because already, the network managed to set a record of nearly 1,800 USD for a single ETH token. Furthermore, all indicators are showing that the subsequent records are also around the corner.
Right now, the main driver of ETH price growth is what appears to be price speculation. However, there is direct and strong evidence that the value of the same token will go up because of other factors. That one is the Chicago Mercantile Exchange and its launch of the ethereum futures. That is going to be a big development for the same marketplace and there is already plenty of historical evidence showing that any crypto futures product is an important step for a cryptocurrency network. That is why so many are referencing the period in late 2017 when the BTC futures options appear as well.
For many, it is the singular element that launched the most pronounced period of the overall bull run of the same year. Today, it is hard to gauge whether or not the same event and the upcoming ETH futures play that role at the moment. But, it is not hard to conclude that it is going to have a ripple effect on the marketplace starting with February 8. Also, some are forecasting that the same development will push the price of an ETH token towards the 2,000 USD range. That in turn could open the door to an even stronger price hike in the following weeks and months.
It is not the Flippening
Whatever might happen in the mid-February period, it is certain that ethereum is in no shape or form threatening the bitcoin network. There are growing signs that the two entities are becoming more and more uncoupled, which is good news, especially for ETH, but there is no talk and for good reason about the flippening possibility. In 2017, that notion was associated with the possibility that the ethereum network will take over bitcoin as the main driver of cryptocurrency interest and investment.
That flip of the crypto’s silver and gold equivalents predicted that ETH would become the dominant global cryptocurrency and thus simply take over the role of bitcoin, which would then naturally slide into the runner-up position. However, even if ETH managed to magically double its value to somewhere around 4,000 USD, the price momentum would still be minuscule in comparison to the BTC potential. There, a reduction of value that is of a gigantic magnitude, like dropping the price to something like 10,000 USD, would still make bitcoin two and a half times stronger than the ETH.
Rising Institutional Confidence
While there is no possibility of a flippening occurring, the crypto space is still aware that many institutional players are now considering investing in ethereum. Similar to esports and many other facets of modern life, the questions of effectiveness and sustainability usually determine the winner in any decision where to invest. ETH proved that both of these factors are on its side. That makes it a natural target for institutional investment from those companies that do not desire to only hold BTC.
Furthermore, companies are more and more impressed with the things like decentralized finance and the overall usefulness of the ETH token as a basic building block for other fintech solutions. With events like the suppression of the wallstreetbets movement and other worrying signs about the mainstream financial institutions bending the rules, most agree that having decentralized ones might not be such a bad idea.