9h00 ▪
5
min reading ▪ by
Luc Jose A.
The world of traditional finance is faltering while the world of cryptos is marking new milestones. Ethereum, the second largest crypto by market capitalization, has overtaken a financial giant, Bank of America. This symbolic milestone, reached with the price of ETH peaking at $3,200 on November 10, provides information on the shift in values towards cryptos at a time when Bitcoin is also reaching historic highs at more than $80,000. Thus, this breakthrough of Ethereum reflects a change in the attractiveness of decentralized assets and in the very structure of the global financial market.
Ethereum overtakes Bank of America: a new milestone for crypto
November 10, 2024 is an important date for Ethereum as its price reached $3,200. Indeed, the market capitalization of crypto is now estimated at $383 billion, approximately $40 billion more than that of Bank of America, one of the pillars of the American banking system. This increase of almost 5% in 24 hours is the result of a favorable context for cryptos, while Bitcoin crossed the $80,000 mark. According to CoinMarketCap, this valuation places Ethereum in an unprecedented position, which confirms its rise among financial giants. This rise is a strong signal of the growing adoption of cryptos and the shift of capital towards decentralized assets.
At the same time, this rise in Ethereum coincides with an inflationary trend in its supply. Ethereum’s annual burn rate sits at around 452,000 ETH, while the issuance rate exceeds double, at 957,000 ETH, with an annual supply increase of 0.42%. After a period of deflation, this inflation is relaunching discussions on the viability of the Ethereum supply in a context where demand continues to grow, in particular thanks to innovations linked to decentralized finance and projects currently being evaluated by the SEC, as the first ETF based on ETH.
Decentralized finance and the prospects for Ethereum
Ethereum’s growing popularity is largely due to its central role in decentralized finance (DeFi), a growing sector that is reconfiguring the rules of investment and financial intermediation. Unlike traditional financial systems, DeFi is based on smart contracts, and offers users financial services without the intervention of banking institutions. Such a trend attracts individual investors, but also institutions, who seek to diversify their portfolios and take advantage of an innovation with high potential returns. Vitalik Buterin, co-founder of Ethereum, introduced the concept of “info finance”, to optimize the collection of market information through decentralized systems. This development is part of a strategy to strengthen market transparency and performance.
The prospects for Ethereum are vast. Many investors anticipate a progression towards $4,000 in the short term, or even beyond, despite possible corrections. This forecast shows investor confidence in Ethereum’s positive development, fueled by dynamics like the SEC’s interest in a spot ETH ETF and the increased recognition of blockchain in the traditional economy. As blockchain technology moves closer to traditional structures, Ethereum could well redefine the framework for financial exchange. The coming months will be crucial in confirming this transition towards a more decentralized and efficient system, where the border between traditional finance and digital finance is gradually disappearing.
Such a rise in power of Ethereum against historic institutions like Bank of America illustrates a gradual shift towards decentralized and digital finance, where blockchain could play a central role. The growing integration of ETH into investment strategies, coupled with continued innovations in the DeFi ecosystem, is shaping a future where cryptos occupy an increasingly legitimate place in the overall financial landscape. If this dynamic continues, Ethereum will not only compete with large institutions. Crypto could also redefine the balance of power between traditional finance and new technologies.
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Luc Jose A.
A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I took the commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to relay the latest technological innovations and to put into perspective the economic and societal issues of this ongoing revolution.
