The price of Ether (ETH), the native cryptocurrency of the Ethereum blockchain network, has been soaring since the beginning of the new year. What's more, it has outperformed Bitcoin (BTC) since Jan. 1, gaining roughly 81% compared to Bitcoin's 26% in their respective USD pairs year-to-date.Bitcoin, Ether YTD performance. Source: Digital Assets Data
There are three main reasons why ETH has been outpacing BTC throughout the past several days. The factors are Ethereum’s accelerating growth, the improving sentiment around DeFi and BTC’s current period of relatively low volatility.ETH/BTC 1-day price chart (Binance). Source: TradingView.com Ethereum is seeing rapid growth fueled by DeFi sentiment
DeFi tokens have been surging rapidly as of late, led by majors such as Aave and SushiSwap, as Cointelegraph reported.
The rally of DeFi tokens is partly fueled by the fast-growing total value locked (TVL) of the DeFi market, which estimates the amount of capital deployed to DeFi protocols.
At over $24 billion, there is more capital locked across DeFi protocols than ever before, which signals massive demand. This is crucial for the momentum of Ethereum — and consequently its Ether token — because more and more apps and tokens rely on its network.
The rising number of users is shown by the massive uptick in Ethereum gas fees. Although high transaction fees are not ideal, Jacob Franek, a partner at DeFi alliance, said this is a positive factor because it shows the willingness of users to pay, indicating genuine demand. He said:“Cumulative fees, yes. It's the most direct measure of aggregate willingness to pay (i.e., demand) for block space. Ethereum has the most valuable block space in crypto now. Would it be better if individual tx fees were lower? Yes. That will come with L2 and other scaling efforts.” Ethereum daily transactions chart. Source: Etherscan.io
Other layer one blockchain protocols are growing with significant antici...