Ethereum continues to struggle with resistance at $250 that has held back the asset for much of the last two years of bear market.
However, a crypto-focused investment fund manager is expecting that the asset’s best use case, decentralized finance, could help propel Etheruem to a $1 trillion market cap. This would take the price per Ether token to over $9000 each, suggesting that $250 won’t stand a chance much longer.
DeFi Continues to Defy All Cryptocurrency Market Expectations
Ethereum was the breakout star of early 2020, helping to carry Bitcoin and the rest of the asset class back to local highs.
The second-ranked cryptocurrency by market cap set a record for the longest string of positive weekly closes in the asset’s history, driven largely in part by the rapid growth of decentralized finance, often referred to as DeFi.
Initial figures year-over-year were extremely positive for the new, alternative method of finance. Ethereum being at the center of the movement had boosted the altcoin early on in 2020.
Related Reading | Ether’s Best Use Case Goes Parabolic, DeFi Users Double in 6 Months
Six months later, DeFi users have gone parabolic, doubling from the start of the year. Meanwhile, ETHUSD is trading at prices below Q1 when user penetration was much lower.
Decentralized finance, however, according to one investment fund manager, will be the driver behind what eventually helps the top altcoin break above $250.
They also believe, DeFi will help push Ethereum to a $1 trillion market cap.
https://twitter.com/josephtodaro_/status/1272941691088052225?s=21
Investment Fund Manager Calls For $1 Trillion Ethereum Market Cap
According to James Todaro, Managing Partner at Blocktown Capital, much like ICOs helped fuel Ethereum’s meteoric rise alongside Bitcoin in late 2017 to a $100 billion market cap, DeFi will be the catalyst that helps the smart-contract focused altcoin to reach a $1 trillion dollar market cap in the next crypto market cycle.
At the height of the crypto bubble, Ethereum had achieved an all-time high valuation of over $1,400 per ETH.
The bubble bursting, and ICOs being labeled as scams and black holes for capital, caused Ethereum prices to plummet.
Related Reading | How Tether On ETH Is Rapidly Becoming The Cryptocurrency Of Choice
If Ethereum were to reach a market cap of $1 trillion, based on the current circulating supply, this would bring the price per Ether token to over $9,000 each.
And although Ethereum is fighting to break above $250 per token and hold, the upcoming ETH 2.0 launch that enables staking, plus the continued surge in DeFi growth, could be the one-two punch required to take out the resistance level.
The two primary factors are holding back a major breakout.
One is the fact that the majority of traders are heavily long on Ethereum ahead of the coming protocol update. The other is due to most current investors are sitting in as much as 80% profit that can be taken off the top the moment prices begin to falter.
Other bullish factors related to ETH 2.0, is the fact that a wallet containing 32 ETH is required to enable staking.
With such a large amount required for staking, more investors will buy up Ethereum to achieve that number, causing demand in the scarce asset to outweigh supply.
