Ether prices, Jan. 1, 2020 to Feb. 26, 2020.Ether has had a great 2020 so far.
Ether bottomed out near $115 on Dec. 18 and rose sharply to a high of $289 on Feb. 15.
Ether's gains look more impressive when compared to bitcoin's 21 percent year-to-date rally.
According to market observers and participants, ether has been driven higher mainly by the upcoming bitcoin reward halving and the resulting rise in bitcoin, the anticipated release of ETH 2.0 and the breakout of the decentralized finance industry.
Whatever the reason, bitcoin may have helped ether and other cryptocurrencies stage a solid rally.
ETH 2.0.This is in stark contrast to the second half of 2019, when ether took a beating, falling from $360 to $116. One of the big reasons for the price drop, other than the bitcoin sell-off during that period, was the decline in investor confidence due to ethereum's persistent scalability issues.
The demand for ether through DeFi applications could also continue to grow in the long run, despite the recent hacks, said Abendschein of Digital Assets Data.On Feb. 14, Valentine's Day, a trader exploited the bZx protocol - the eight-largest DeFi protocol by TVL - via a complex set of transactions and took home $350,000.
Since Feb. 17, the total ether locked in DeFi has dropped from 3.07 million to 2.8 million.
"The recent bZx hack may have a short-term negative impact on ether as many investors who previously accumulated ETH due to the faith they had on DeFi might refrain from participating in DeFi ecosystem for a while," said Nair of CoinSwitch.
Nair expects investors to return to DeFi and ether over the long run.
The 3 Factors Fueling Ether's 2020 Rally
Published on Feb 26, 2020
by Coindesk | Published on Coinage
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