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Ethereum (ETH) Records its Highest Price Ever as Alt Season Begins

The second-largest cryptocurrency by market capitalization, Ethereum, has hit a new all-time high against the US dollar. The ETH/USD trading pair recorded a value of $1,440 on January 19, 2021, narrowly beating its previous high of $1,420 on January 8, 2018.

Since dropping to a yearly low of $88 last March during the pandemic outbreak, Ethereum has been steadily climbing, hitting new highs monthly. Its recent record high comes ahead of the launch of Ethereum Futures on the Chicago Mercantile Exchange (CME). This will make Ethereum available to institutional investors, promising a steady flow of new money into the digital asset.

The open interest on other Ethereum derivatives has also reached a new all-time high of $4.5 billion, with popular derivatives platform Deribit introducing a new $20k strike for ETH on December 21, 2021.

ETH/USD chart courtesy of Trading View

Alt Season

While Ethereum’s recent rally has likely been run off the back of decentralized finance (DeFi) projects using ERC20 protocols, many also see it as a sign that “alt season” has arrived. Alt season is the term given to a typical period of growth for alternative cryptocurrencies following a large Bitcoin rally. After hitting a record high of around $42,000 last week, Bitcoin has tapered off and now appears to be giving way to altcoins. The BTC/USD pair has recently been trading in a tight range between $36,000 and $38,000 while many smaller cap coins have enjoyed large gains.

The decentralized Web 3.0 interoperability coin Polkadot (DOT) has enjoyed particularly large gains, up by almost 100% in the past week, while Chainlink (LINK), the most widely used oracle network for smart contracts, is up 50%. The success of these projects represents the growth of DeFi, as they, along with Ethereum, provide the foundations on which DeFi protocols operate. Another sign is the growth of Wrapped Bitcoin (WBTC), which provides a method of using Bitcoin on decentralized platforms. Since entering the sector less than two years ago, it has achieved a valuation of $4 billion and become the 13th largest coin by market cap.

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