Virtually all the attention in the cryptocurrency space has been on Bitcoin this past week as it soared to a new 2020 high driven by momentum from PayPal accepting cryptocurrency payments. Ethereum has caught a small wave from this hype, but analysts think there is still much more room to grow.
Ethereum has only managed to gain a little more than 4% since opening the week at $380. It briefly touched $400 on Oct 21 before retreating sharply. Bitcoin, on the other hand, is up by over $1,200 this week, cracking the $13,200 level to register a new 2020 high.
Since the beginning of the year, however, ETH has outperformed BTC by a factor of two, and that steady growth is likely to continue into next year as the technical, fundamental, and on-chain indicators strengthen.
Additionally, Ethereum is still 72% down from its peak whereas Bitcoin is now only 35% off its own all-time high.
Ethereum Building Momentum
Several factors have emerged in 2020 that are helping to cement the notion that Ethereum is a complete financial ecosystem on its own, not just a store of value or a hedge against failing fiat.
Ethereum founder Vitalik Buterin recently suggested that the asset should no longer be called an ‘altcoin’ because it simply does so much more today than it did five years ago:
In plain language everyone can hopefully understand:
In 2020, continuing to refer to ethereum as an "alt" is as outdated as referring to a lambo as a "horseless carriage". https://t.co/CMmP6MEXlU
— vitalik.eth (@VitalikButerin) October 21, 2020
ETH is being used and invested to make more ETH and earn rewards in other cryptocurrency assets. Bitcoin is largely being kept in cold storage, but the amount of BTC tokenized on Ethereum has also surged by record amounts this year.
Institutional investment funds such as Grayscale Investments have also been loading up on ETH as it has been largely viewed as undervalued. Industry observers have been eyeing this ‘perfect storm’ which could send Ethereum prices far higher before 2020 closes.
Staking starting this week Phase 0
On chain data showing largest accounts are accumulating and moving OFF exchanges
Sorry fam, there won't be any eth for Paypal users to buy at this rate pic.twitter.com/RoaUtAIvrl
Pentoshi (@Pentosh1) October 21, 2020
ETH 2.0 Hopium Growing
While DeFi has been the driver for Ethereum prices in 2020, it has not had anywhere close to the impact that ICOs did in 2017. The next major milestone for Ethereum is the long-awaited launch of ETH 2.0 Phase 0, which has been dubbed Beacon Chain.
According to lead developers, the deposit contract release is imminent and genesis for the new blockchain could be just weeks away. While staking opportunities may not materialize immediately, there will be many investors holding on to ETH until the time comes that Beacon Chain is running smoothly and staking can be done with a simple click or two.
It could be a major economic shift as traditional finance continues to fail on an epic scale.