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Three Possible Reasons Why Ethereum Hit Two All-Time Highs in One Day

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Wed, 11/03/2021 - 10:20
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Yuri Molchan
Here are likely reasons why Ethereum reached two consecutive all-time highs in just a single day
Three Possible Reasons Why Ethereum Hit Two All-Time Highs in One Day
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On Nov. 2, the second-largest cryptocurrency, Ethereum, soared first to the historic peak of $4,477. A few hours later, the native cryptocurrency of Vitalik Buterin's blockchain spiked as high as $4,643.

This double price rise may have been caused by the following reasons.

Massive rise of ETH active addresses

Data shared by popular on-chain analytics team Santiment shows that, in the past four weeks, the number of active Ether addresses has surged by a whopping 45%. This, according to the analytics team of the company, shows a spike in the coin's utility.

Ethereum's history now goes back six years; it was created after Bitcoin clones Litecoin and Dogecoin, with Mike Novogratz being the first Wall Street investor, who in 2015 bought a staggering 500,000 ETH from Vitalik Buterin at a price slightly under $1.

Besides, according to Chinese crypto journalist and blogger, Colin Wu, Chinese traders are beginning to use Ethereum as a hedge against inflation. Thus, ETH gradually begins to compete with Bitcoin in this field.

Besides, Ethereum remains the leading platform for users of dapps, smart contracts and NFTs.

744,020 ETH burned since Aug. 5

According to watchtheburn.com, since Aug. 5—the day when the EIP-1559 upgrade (also known as the London hardfork) was rolled out with the burning mechanism for ETH fees—over 744,000 Ethers have been burnt.

That is the equivalent of an astounding $3,424,606,965.

The implementation of the eliminating mechanism for ETH that came along with the London hardfork has started making Ethereum a deflationary cryptocurrency.

Since the introduction of EIP-1559, Ethereum has risen approximately 33%, becoming more and more deflationary.

One more likely reason is that CME announced the upcoming launch of micro Ethereum futures in early December.

Related
Ethereum Futures ETF to Appear Earlier Than Spot BTC ETF, Here's Why

Ethereum hashrate soars to a new ATH

As covered by U.Today, the Ethereum hashrate reached a lifetime peak of 812,768 GH/s on Tuesday, Nov. 3.

Even though ETH fees are being burned now, as written above, miners continue to be attracted to the Ethereum network as they can be "tipped" by network users who want their transactions to be verified faster—a similar mechanism to that utilized by Bitcoin users.

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About the author

Yuri is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. ‘Hodls’ major cryptocurrencies and has written for multiple crypto media outlets. 

His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.

Currently Yuri is a news writer at U.Today and can be contacted at yuri.molchan@u.today.