Connect with us

Hi, what are you looking for?

ELEVENEWS

Ethereum

Ethereum Weathers Market Correction, ETH/USD Can Reach $10,500

A Fundstrat Global Advisors LLC strategist, David Grider, predicts the Ethereum price to reach $10,500. This is a day after the second most valuable digital asset rose to all-time highs above $1.4k, Bloomberg reported on Jan 20.

Ethereum Stands out

In a note to clients on Wednesday, David said Ethereum has the best risk/reward investment play in crypto. The strategy further added that blockchain computing might be the future of the cloud, whose risks are only limited to network upgrades and a bear market.

As per the analyst, Ethereum’s exponential price gain is due to the increasing popularity of decentralized finance applications.

These are mostly open-source dApps that ride on the censorship-resistant base layer, enabling people to access financial instruments that were previously accessible to accredited investors only.



The DeFi Effect

The democratization of finance through these applications explains the influx of capital to the sub-sector.

According to Defi Pulse, a site that tracks the performance of leading DeFi dApps in Ethereum, open-source finance applications now manage over $23 billion. Year-to-date, this value is up more than 23x.

Due to this rapid expansion, the demand for ETH, the native currency of Ethereum, remains high since it is used to pay fees.

While a direct correlation between ETH prices and the number of funds locked by DeFi dApps, on-chain transaction fees remain at record levels, negatively impacting user experience.

Transaction Fees High, but Ethereum will Survive

According to BitInfoCharts, the average transaction fees in Ethereum on Jan 19 was $8.7, a 7X increment over the last two months.

However, this is also less than $16.5, a level that network users had to pay when ETH/USD rate rose to above $1,400.

Still, regardless of the high transaction fees, Mark Cuban, the billionaire investor, expects Ethereum to survive if there is a cataclysmic fall in digital asset prices. Mark assesses that the current prices of crypto mirror those of the dot com bubble.

In a tweet endorsing ETH and BTC, he says:

“Watching the cryptos trade, it’s EXACTLY like the internet stock bubble. EXACTLY. I think BTC, ETH, and a few others will be analogous to those built during the dot-com era, survived the bubble bursting, and thrived, like AMZN, eBay, and Priceline. Many won’t.”

News Source

Advertisement
Advertisement

Copyright © ELEVENEWS