Ethereum Just Had Its Biggest Month Yet

The second largest cryptocurrency by market cap not only rallied to an all-time high last month, but also had a number of other important achievements.

On the price front, investors saw the highest monthly close in history with the coin ending the month at $1,313, beating the previous record set in the summer of 2019, as well as the confirmation of the 20-month moving average above the 50-month moving average. The latter is a rather bullish pattern from the price performance perspective.

Ethereum is entering February with a market cap of over $151 billion, which is just below 15% of the value of all cryptocurrencies. This also means that the two largest cryptocurrencies, Bitcoin and Ethereum, have an aggregated dominance of 75%, leaving the rest of the pack well behind.

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As Money Movers’ data shows, Ethereum has outpaced Bitcoin in terms of the daily transferred value, reaching $19.1 billion per day—versus the latter’s $9.78 billion.

This can be attributed to a number of factors, including the trading volumes on decentralized exchanges (DEX). According to data by Dune Analytics, these surged by 135% in the last 30 days, surpassing the $54 billion mark.

The decentralized finance sector (DeFi), which to a large extent relies on the Ethereum blockchain, as well the growing amount of funds locked in the ETH 2.0 deposits, are other factors to consider. According to DeFi Pulse, there’s over $27 billion of total value locked in DeFi smart contracts, while the amount of ETH coins sent to the ETH 2.0 deposit address is approaching 2.9 million (or, roughly $3.8 billion at current prices).

Ethereum Price Passes Another Milestone

The price of Ethereum isn’t just near an all-time high. It’s stayed high all month as the network rides rising use of decentralized finance (DeFi) applications.  On January 4, the price of Ethereum closed at $1,042. On January 29, it closed at $1,380. In between it never closed below the $1,000 mark. As Ethereum researcher Evan Van Ness noted, using data from Messari, those 26 consecutive days are something of a milestone. “Until this year, $ETH had closed above $1000 on only 25 non-consecutive...

Those involved in Ethereum mining have benefited too from the asset’s recent solid performance. As per The Block, Ethereum miners brought in $800 million in January revenue, surpassing the previous record highs seen exactly three years ago, in January 2018.

A substantial part of this—more than $311 million, or nearly 40%–came from transaction fees, showing how they are helping to reward the miners keeping the network secure, even if they are irksome.

However, mining Ethereum is getting harder. As revealed by Glassnode earlier today, the cryptocurrency’s mining difficulty has reached an all-time high of 4,745.167 TH. This means miners will need more resources to generate new coins.

Ethereum has a busy month ahead

Ethereum will see several events occur this month, particularly enabling institutional investors to get involved with the asset.

On February 8, the CME Group is launching its Ethereum futures contracts, making the assets more widely available to institutional investors.

More institutional exposure is expected via the Grayscale Ethereum Trust, which last week resumed the private placement of its shares for accredited investors. These will also be available via Galaxy Digital’s Ethereum-focused funds, which are—according to the recent letter to investors—set for launch in mid-February.

But if February wants to be another record-breaking month, it will have to jump over a bar that’s now even higher.