It’s not just ether (ETH) that’s rallying to a new all-time high Tuesday. Also rising are major decentralized finance (DeFi) tokens as well as cryptocurrencies of the very blockchains competing against the Ethereum system.
At press time, ether was trading around $1,637.21, up 10.32% in the past 24 hours. The price of the No. 2 cryptocurrency by market capitalization has continued gaining since it went above $1,500 for the first time on Tuesday.
According to research firm Messari, after ether went on a tear several DeFi tokens including chainlink (LINK), sushiswap (SUSHI) and aave (AAVE) followed the bullish trend, logging historic high prices Wednesday.
What’s more, prices for the cryptocurrencies of so-called Ethereum killers protocols also rose to new highs on Wednesday, including polkadot (DOT) and solana (SOL).
“Ether made a significant push [since Tuesday] and that is causing projects linked to the DeFi space – as well as DOT, which is seen as a potential ‘Ethereum killer’ – to appreciate and aim for new all-time highs,” said Hunain Naseer, senior content editor at crypto exchange OKEX’s research unit, OKEx Insights. “This is evident from the 24-hour gains of LINK, AAVE, SUSHI, yearn.finance (YFI) and DOT.”
Some of what’s driving the prices is more investors are starting to see value in the projects behind these tokens, so market excitement is building.
For example, Switzerland-based investment product provider 21Shares announced Tuesday it will soon launch an exchange-traded product (ETP) for polkadot. That news has led to “newfound” interest from buyers who are staking more DOT on exchanges, according to Pete Humiston, manager of Kraken Intelligence.
“In a sense, a positive feedback loop is beginning to form,” said Humiston.
While the positive trading movement in ether and DeFi tokens were in part triggered by the WallStreetBets’s trading drama involving GameStop (GME) and other stocks, according to analysts, ether got a big push when digital asset manager Grayscale Investments said it was reopening its Ethereum Trust (OTCQX: ETHE).
Data from data firm Skew shows Grayscale added approximately 24,800 ether on Tuesday, then worth more than $37.8 million. (Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.)
“The institutions are buying ether,” Ryan Sean Adams, founder of newsletter Bankless, wrote in a tweet. “And they’re just getting started.”
The Chicago Mercantile Exchange (CME)’s new ether futures contract is launching this month, and many believe it will push even more institutional investors into ether after they took positions in bitcoin last year.