Why Is Ethereum Going Up and What's Driving Its Growth

Ethereum's growth can be attributed to its increasing adoption and use cases.

The rise of decentralized finance (DeFi) has been a significant driver of Ethereum's growth, with the total value locked (TVL) in DeFi protocols increasing by over 1,000% in 2020.

Ethereum's scalability issues have been a major concern, but the upcoming transition to proof-of-stake (PoS) is expected to significantly improve its performance.

This transition, also known as Ethereum 2.0, is expected to increase the network's transaction capacity by a factor of 100, making it more viable for mainstream use.

Ethereum's price is rising due to the growing demand for its non-fungible tokens (NFTs). NFTs contain unique digital assets like art and are part of the Ethereum blockchain.

The NFT market value tripled in 2020, reaching over $250 million, which significantly impacted the ETH value. This surge in NFT trades is contributing to Ethereum's price increase.

After crashing 11% in the past three days, Ethereum's price is now up 1.32%, trading at $3,042.

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The Ethereum market is being driven by a few key factors. The approval of an Ethereum ETF is expected to have a significant impact on the crypto market, and many investors are keeping a close eye on the decision.

Investors like BlackRock Advisors have already applied for an iShares Ethereum Trust, which caused a surge in Ethereum's price last November. This filing was a major catalyst for Ethereum's upward trajectory.

The crypto market has maintained its volatility, despite the end of the crypto winter. This means that prices can fluctuate rapidly, making it essential for investors to stay informed and adapt to changing market conditions.

In April 2021, the European Investment Bank announced its plans to offer a two-year digital bond on the Ethereum blockchain, setting yet another price record for Ethereum.

Ethereum's price has been increasing after every piece of news about investment into the platform came out in 2021. This trend continued into 2022, with the Ethereum Merge being finalized, marking a major milestone for the Ethereum blockchain.

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The Ethereum Merge updated the blockchain with its new Proof-of-Stake consensus mechanism, attracting many new ESG-minded investors.

Ethereum ETFs have had consistent inflows, with $90 million recently added, according to Farside Investors data.

Stablecoin activity on Ethereum has surpassed Tron, with $60.3 billion in USDT now hosted on the Ethereum network, Coindesk reported.

In early-to-mid 2021, younger small-cap tokens showcased escalating volatility during the bull cycle and the May correction, but Bitcoin and Ethereum have been relatively low in volatility since the COVID-19-induced market crash.

Bitcoin's struggle to break past the $100,000 mark could inadvertently benefit Ethereum, diverting investor attention and funds toward Ethereum, pushing its price higher.

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Crypto trading volume remains high, with Ethereum's 24-hour trading volume reaching $39.3 billion. This is a significant indicator of investor interest and confidence in the market.

Binance is the largest contributor to Ethereum's trading volume, accounting for about 11% through spot trading and nearly 40% through futures trading. Exchanges like OKX, Bitget, and ByBit also follow Binance in contributing to the trading volume.

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The high trading volume is likely driven by the recent surge in Ethereum's price, which has increased by 37% in the past month. This optimism is fueled by expectations of a more favorable regulatory environment and Ethereum's dominant role in decentralized finance (DeFi).

Here's a breakdown of the top contributors to Ethereum's trading volume:

Note: The exact percentages for OKX, Bitget, and ByBit are not provided in the article section facts, so they are left blank in the table.

The supply of Ethereum is about to get a major overhaul. In the second half of 2021, the Ethereum network will undergo a major change that will limit its supply.

This change is a result of the Ethereum London Hard Fork, which will burn the fees charged from crypto users, creating deflationary pressure on ETH.

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The return on investment for Ethereum has been impressive, with its year-to-date performance currently sitting at 33%. This means that if you invested $10,000 in ETH on January 1, 2024, your portfolio would be up roughly $3,317 after 317 days.

Ethereum's market capitalization stands at $400 billion, a significant increase in value. The NFT market, which is part of the Ethereum blockchain, tripled in value in 2020, reaching over $250 million.

The decentralized finance (DeFi) explosion has also contributed to the Ethereum price increase, with many DeFi tokens based on the Ethereum blockchain. This has led to an increase in gas fees, which are payments made by users to compensate for the computing energy required to process and validate transactions on the Ethereum blockchain.

Investors can expect one of two outcomes for Ethereum at its current make-or-break point: a flip of the hurdle leading to a rally to $4,000 or a rejection leading to a correction that retests $3,000.

The supply of Ethereum has been unlimited, but that's set to change with the Ethereum London Hard Fork.

In the second half of 2021, the Ethereum network will undergo a major change, which will impact the supply of Ethereum.

The Ethereum London Hard Fork will burn the fees it charges from crypto users, creating deflationary pressure on ETH.

This means it will be more likely for ETH tokens to increase in value over time since their maximum supply became limited.

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The Ethereum network has undergone significant changes in recent times, and one of the most notable effects is the shift in gas fees. Gas fees, measured in Gwei, are like taxes required for secure transactions, and they plummeted post-upgrade to Proof-of-Stake (PoS).

As of January 5, the gas fee for a transaction on the ETH network is 15.84 Gwei. This is a direct result of the blockchain upgrades that aim to solve the trilemma of blockchain, balancing decentralization, security, and scalability.

The Ethereum network's on-chain value growing presents opportunities, and investors flocking to it drives gas fees up. This typically occurs during market upswings, peaking at all-time highs.

In the second half of 2021, the Ethereum network will undergo another major change, and this will create deflationary pressure on ETH, making it more likely for ETH tokens to increase in value over time since their maximum supply became limited.

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Ethereum's technical analysis is a key factor in its recent price surge. The network's growing adoption and increasing transaction volume are contributing to its upward trend.

One notable metric is the rise in Ethereum's gas fees, which have increased by 25% in the past month. This indicates a growing demand for the network's services.

As more developers build decentralized applications (dApps) on Ethereum, the network's utility and value proposition are expanding. This increased adoption is driving up demand for Ether, the native cryptocurrency of the Ethereum network.

Ethereum's platform has undergone significant upgrades since its creation, with the goal of improving efficiency, speed, and scalability.

These upgrades were divided into four main stages: Frontier, Homestead, Metropolis, and Serenity. Serenity aimed to improve the platform's efficiency, speed, and scalability, and is also known as Ethereum 2.0 or Eth2.

The Ethereum 2.0 upgrade is a major improvement to the existing Ethereum blockchain, aiming to increase the number of transactions and address bottlenecks. This upgrade could enable more financial institutions to use Ethereum.

The upgrade will involve a few hard forks, such as the Ethereum London Hard Fork, which was launched in August 2021 to even out network fees and limit the ETH supply.

For another approach, see: Ethereum Upgrade Date

Ethereum estimates that the 2.0 network could go live by 2022 if development is successful, but cautious experts say the upgrade could take years.

Here are some key upgrades in the past five years that shaped Ethereum:

Ethereum's price chart is updated in real-time, with the most recent update being at 11 PM.

The Ethereum price has been impacted by its innovative smart contract technology, which was first introduced in 2015.

Ethereum's smart contract technology has allowed it to stay ahead in innovation, with continuous major network upgrades ensuring its continued success.

The latest network upgrade, Cancun, was launched on March 13, 2024, and has likely had an impact on the Ethereum price chart.

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The 7-Day Outlook for Ethereum is looking promising, with a predicted price of around $3,300, representing a near 6% uptick. This is based on CoinGagpe's predictions.

The data shows that the Ethereum price has been steadily increasing over the past few days, with a significant jump on January 5th, 2025, where the price rose by 14.38%. This indicates a strong upward trend.

Here's a breakdown of the predicted prices for the next 7 days:

The predicted prices show a significant increase, with the largest jump on January 10th, 2025, where the price rose by 37.49%. This suggests a strong momentum in the market.