ETH broke above $1,200 for the first time in almost three years, extending its weekly gains to 62%.
Bullish fervor surrounding Ethereum (ETH) intensified on Wednesday, as the second-largest cryptocurrency broke above $1,200 for the first time in three years. The gains were largely driven by a confluence of fundamental factors, including Bitcoinâ€™s parabolic rally, theÂ anticipation of ETH futures contractsÂ and a surging DeFi sector.Â
ETH price exceeds $1,200
Etherâ€™s value peaked at $1,223.84 on Bitstamp, its highest since Jan. 2018 just before the market topped. At press time, ETH was up 8% and trading just above $1,210. The cryptocurrency is up more than 60% over the past week, bringing its total market cap to $135 billion.
At the current pace, Ethereum looks poised to smash its previous record high of $1,432.88, possibly in the next few days.
Bitcoin juices up entire market
As 2021 ramps up, Bitcoinâ€™s gravitational pull on the broader crypto market has intensified. The flagship cryptocurrency has justÂ peaked north of $37,150 and is continuing to climb.
Over the past month, Bitcoin has rallied almost 90% on the back of growing institutional interest and a supply squeeze limiting the available supply. Ether and other digital assets have benefited from Bitcoinâ€™s leadership pace. In fact, thereâ€™s some evidence to suggest thatÂ institutional investors are eyeing ETHÂ as the Bitcoin trade becomes crowded with players with deeper pockets.
CME set to launch ETH futures
CME Group has also identified growing institutional interest in Ethereum and has announced plans to launch a new ETH futures product next month.
Beginning Feb. 8, traders will have the opportunity to bet on Ethereum via regulated exchanges. The new futures product, referred to as the CME CF Ether Reference Rate, will provide traders with more efficient exposure to the digital asset, enabling wider price discovery and, possibly, higher adoption within institutional circles.
DeFi boom is not over
While the DeFi craze appears to have settled down following last summerâ€™s historic highs, the ecosystem is growing in lockstep with the broader market. As of Wednesday, virtually every major DeFi coin in the top 20 had reported double-digit weekly gains — some even exceeding the explosive price growth of Ethereum.
SinceÂ many DeFi projectsÂ are built on Ethereum, the sub-class has a positive impact on the ETH price. According to CoinMetrics, the DeFi boom couldÂ fuelÂ Ethereum’s growth over the long term.Â
Industry data also reveal a substantial increase in total value locked, or TVL, in DeFi projects. At last check, nearly $21.7 billion had been locked into the ecosystem, the highest on record.