In 2018, Ethereum rallied as high as ~$1,430 on the back of an influx of demand caused by the then-ongoing initial coin offering (ICO) boom.
ICOs had to raise money, and ICOs often raised money so through ETH — a widely-adopted, well-known, and easily-accessible cryptocurrency. Hence, the demand for Ethereum spiked as investors began to speculate they could multiply their Ethereum by trying their hand at early-stage crypto startups.
With ICOs now bust, one of the cryptocurrency’s biggest demand drivers is gone. Avi Felman of BlockTower Capital recently went as far as to brand the all-time high price ETH reached a “red herring,” citing the unique and now-defunct dynamic that pushed the asset higher:
Yet a promient analyst has postulated that demand for Ethereum will eventually hit a new all-time high.
What Could Drive Ethereum Demand to Fresh Highs In the Coming Cycle
In a recent Twitter thread, a top trader revealed a confluence of reasons why the demand for ETH will reach a new peak.
His attempt to do so comes as sentiment has been shared by certain traders and commentators that ETH’s golden era is long passed.
Some of the reasons the trader listed are as follows:
Not Everyone Is Convinced ETH Is a Good Investment
These catalysts may be bonafide, but not everyone is convinced that Ethereum is a viable investment.
Galaxy Digital’s Michael Novogratz wrote in February that Ethereum remains in a “proving phase.” To him, the cryptocurrency and underlying blockchain do not yet have a killer use case like Bitcoin has being “digital gold.”
The calls for caution when dealing with the altcoin has been echoed by Jeff Dorman, CIO of Arca. He explained that because Ethereum is so closely correlated with Bitcoin and smaller altcoins at the moment, investing in ETH is useless.
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Featured Image from Shutterstock Price tags: ethusd These 2 Factors Suggest Demand for Ethereum Could Set a New High
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