Statistics shared by insider Colin Wu and on-chain data agency Santiment show what drove Ethereum to the $3,800 price mark earlier today and what is still holding it in the $3,750 area.
On Sept. 1, Ether broke above the $3,500 level, recapturing it for the first time since the middle of May.
NFT craze and burned ETH fees
Chinese blockchain journalist Colin Wu has tweeted that the recent price surge of the second-largest crypto, Ethereum, is largely down to the rising popularity of non-fungible tokens (NFTs) that are mostly based on the ETH blockchain.
This year, several expensive pieces of art have been sold as NFTs, and Tron CEO Justin Sun boasted about buying some of them. He bragged about grabbing artwork by Picasso and Warhol - "Femme nue couchée au collier" and "Three Self-Portraits" – at the price of $20 million and $2 million, respectively.
He has also bought the EtherRock 87 NFT for $611,000. Another example of a popular NFT sale is Fortune's NFT collection. The renowned magazine launched its non-fungible token collection that includes its recent cover art and sold it for $1.3 million worth of Ethereum.
The second reason mentioned by Wu is the fact that, as of Sept. 2, 164,000 Ethers have been incinerated. The implementation of the EIP-1559 Ethereum upgrade on Aug. 5 now allows for the burning of a portion of ETH fees.
Investor focus moving from SOL to ETH
As per data provided by Santiment analytics vendor, crowd sentiment at the moment is shifting from Solana (SOL) to Ethereum. This is one of the causes pushing ETH first above $3,500 on Monday and today to the $3,800 level.
On Aug. 31, SOL reached an all-time high of $130, hitting $100 just one day prior to that.
Also, according to CryptoQuant on-chain analytics company, the Ethereum supply on centralized crypto exchanges has been greatly reduced in the past week.