Ethereum (ETH) Appeared to Be a Top Beneficiary of 2020

Ethereum (ETH) Appeared to Be a Top Beneficiary of 2020

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While Bitcoin is breaking up through one resistance level after another, Ethereum is growing steadily and looks like the main gainer of the outgoing year.

Bitcoin has risen over the $27K resistance level and continues to rise. Many hope that it will not stop till $40K. This, in particular, was stated by the popular trader Michael van de Poppe. Meanwhile, Ripple (XRP) is increasingly sliding down, its capitalization is already more than half the capitalization of the stablecoin Tether (USDT), which is located solidly at third place in the Coinmarketcap rating. Perhaps before the end of the year, we will see XRP lose one more position and yield fourth place to Litecoin (LTC). However, Ethereum attracts more users. And this is understandable. The leading altcoin and the second largest cryptocurrency is demonstrating stable growth, explained by impressive fundamental factors.

While bitcoin has grown almost 4 times over the year, from $7200+ to more than $28K, then ETH soared by 5.6 times, from $130 to $730+. BTC is constantly updating historical highs, and Ethereum is still far from that. BTC capitalization increased less than 4 times over the year, from $130 billion to almost $ 520 billion; ETH’s capitalization has grown almost 6 times, from $14+ billion to $83+ billion. Experts note that Ethereum’s stable growth is in progress at an accelerating rate. The main fundamental factor that supports ETH is the successful start of the Ethereum blockchain update, the launch of Ethereum 2.0. phase 0. According to the founder Vitalik Buterin, the update is proceeding extremely successfully and in accordance with the roadmap. In December, users got the possibility to take advantage of Ethereum’s transition from Proof-of-Work consensus to Proof-of-Stake. Users can now deposit their ETH into a smart contract deposit and get passive income.

The second important factor supporting ETH is the success of Decentralized Finance (DeFi). DeFi projects brought the tools of the fiat financial market to the cryptocurrency industry. Investors in DeFi projects were able to get tens and hundreds of percent of the profit. Most of these projects are launched on the Ethereum blockchain.

Raoul Pal, CEO of Real Vision, a visionary research company, says he intends to focus more on the altcoin segment in 2021. Until now, he has invested in BTC and ETH but believes that altcoins promise significantly higher returns. However, ETH remains the most reliable of them.

According to Reuters, analyst firm Morningstar has announced that the Grayscale Ethereum Trust, which invests in ETH, is the best fund of 2020. Morningstar states that shares of this fund have risen in price by more than 330% over the year. There is an opinion in the expert community that next year ETH may move bitcoin from its first place in terms of capitalization. Now it’s hard to believe because the capitalization of BTC is 6.3 times more than Ethereum’s one. But the crypto market has proven several times that even incredible predictions can come true here.