Ethereum (ETH) may be the most popular cryptocurrency in terms of blockchain use at the moment. However, transactional costs are still a major hurdle for the second-largest crypto by market cap.
On Friday, 5 Feb, the crypto briefly pierced $1,750 a coin. Decentralized Finance (DeFi) is also partly to blame due to the growing demand of DEXs, which rely on the underlying Ethereum blockchain.
Gas Fees Costing an Arm and a Leg
According to Gasnow, ether transactions almost climbed as high as 500 gwei (Ethereum’s version of Satoshis) on the day.
This means that even slow transactions would cost a minimum of around $7. But DEXs such as Uniswap (which use smart contracts) have seen transactions in excess of $70 over the last few days.
Ethereum Heading to $2,000 Next?
ETH broke its all-time high again and will likely continue to do so in the coming weeks. The world’s second most popular cryptocurrency is looking to push towards $2,000 a coin following the latest price action.
Ethereum’s bullish sentiment has resulted in gains of about 140% since the beginning of the year. The remarkable climb can be attributed to several possible factors.
The Uniswap DEX is currently achieving $1.89 billion in daily volume. This is more than long-standing exchange, Kraken, which ranks as the third-largest centralized exchange in terms of volume. Then there’s Grayscale, which recently reopened its Ethereum trust. The purchase of over $38 million in ether is likely a factor in the latest surge.
Ethereum at $2,000 may sound like something out of a dream. However, strategists at Fundstrat Global Advisors LLC believe it could push much higher than that. In fact, they say it could go parabolic, going as far as $10,500.
Fundstrat believes the growing popularity in the DeFi sector is a key reason for ethereum’s latest rally. With so many DeFi projects running on the Ethereum blockchain, the euphoria will likely trigger massive demand.
Staked ETH Continues to Climb
The number of ETH staked in version 2 of the project now sits at about 2.94 million. This makes up over 2.5% of the circulating supply and means that the ETH 2 contract now holds over $5 billion in value.
As ETH 2.0 looms, ETH will likely continue to receive bids, spurred on by the increased usage from the various DEX and DeFi projects.