Photo: Coin Telegraph
(Coin Telegraph) - The price of Ethereum is surging past $2,000 with strong momentum while gaining a bit of ground on Bitcoin in the last 24 hours.
There are three key reasons behind the explosive rally of Ether, namely the rapid growth of DeFi, the hype around ETH after the CME futures listing, and the decreasing amount of BTC and ETH on exchanges.
CME futures listing
Ethereum hitting $2,000 for the first time ever follows the launch of the Chicago Mercantile Exchange's (CME) launch of Ethereum futures earlier this month, which primarily target institutional investors.
Prior to the listing, there was a popular narrative that the CME listing would cause the price of Ethereum to decline significantly, because the CME Bitcoin futures listing in 2017 coincided with the local Bitcoin top at the time.
Explosive growth of DeFi
According to data from Dappradar.com, the total value locked (TVL) of the decentralised finance (DeFi) market is almost $50 billion.
The term TVL is used to measure the amount of capital that is locked up in every DeFi protocol. For instance, if $2 billion are being used on a lending protocol to borrow or loan money, that would mean the TVL of the protocol would be $2 billion.
Ethereum directly benefits from the high TVL of the DeFi market because Ethereum is used as a means to pay transaction fees on the Ethereum blockchain network.
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