Ether (ETH), the second-biggest cryptocurrency breached the $4,000 level on May 10, 2021. Based on the market fundamentals, it looks like it is not yet ready to stop its meteoric surge anytime soon.
The crypto passed this critical psychological barrier on many exchanges, including Coinbase and Huobi. Notably, this new milestone comes around a week after breaking the $3,000 level.
In the past week, ETH managed to overtake Bank of America as the 28th-biggest asset in the world. But, hovering above $454.4 billion as of today, ETH has now exceeded the market capitalization of consumer staple giants Johnson&Johnson and Wal-Mart. It is heading for JPMorgan Chase, which is the biggest American bank by assets under management.
A part of this impressive surge may be linked to the increasing institutional interest in the asset. This week, a CoinShares report stated that institutions acquired more than $30 million in ETH at the end of April. Many money managers are thought to now own around $13.9 billion in ETH or ETH vehicles.
Similarly, there have been considerable strides in adoption. In the past week, the European Investment Bank confirmed that they would be issuing a $120M bond on the world’s biggest layer-1 in conjunction with major banking entities like Goldman Sachs. Moreover, the boom in the decentralized finance (DeFi) space, which is one of Ethereum’s major communities and use-cases, continues at a remarkable pace.
Nevertheless, the most bullish catalysts on the horizon are the major infrastructural upgrades to the network: ETH 2.0. EIP-1559 and EIP-1559. Both of these upgrades are scheduled to be included in the ‘London’ hard fork. Interestingly, the fork will feature an overhaul of the ETH fee structure and is expected to decrease gas costs considerably while also possibly making Ethereum a more deflationary asset.
In turn, Ethereum 2.0 will transition the network to become a proof-of-stake consensus model. The new working model is expected to reduce sell pressure and encourage holding the asset for the long term.
Ethereum’s remarkable run has prompted renewed speculations that there might be a ‘flippening’ on the horizon. That is a long-expected event among the Ethereum community where ETH overtakes BTC in market capitalization.