What's Driving The Ethereum Rally?

Ethereum (ETH) touched a fresh all-time high of $4,138.46 in the early hours of Monday as the surge in the second-largest cryptocurrency by market cap continued unabated.

See also: How to Buy Ethereum (ETH)

What Happened: The Vitalik Buterin co-created cryptocurrency traded 3.54% higher at $4,114.19 at press time.

In comparison, the apex cryptocurrency Bitcoin (BTC), traded 0.68% higher at $58,820.05 at press time.

On Monday, on-chain analytics firm CryptoQuant’s CEO, Ki Young Ju, said that United States-based institutional investors were behind ETH’s parabolic move.

Q: What's behind this $ETH parabolic move?

A: US (institutional) investors. https://t.co/4CvbSrF4tt pic.twitter.com/S24Dty4b0i

— Ki Young Ju 주기영 (@ki_young_ju) May 10, 2021

Ki pointed to what he called an “insane” Ethereum-Coinbase premium in a tweet. 

“Selling [ETH] now seems not a good idea in the long term. Follow US institutional investors, not against them,” said the analyst.

Still an insane $ETH Coinbase premium.

Selling $ETH now seems not a good idea in the long term. Follow US institutional investors, not against them. https://t.co/mZcGk6Gvrs pic.twitter.com/IX8cVP1ppY

— Ki Young Ju 주기영 (@ki_young_ju) May 8, 2021

Earlier, he said that U.S. institutional investors are buying ETH using the exchange run by Coinbase Global Inc COIN.

Why It Matters: LikeFolio co-founder Andy Swan said Sunday that there was a flow from Dogecoin (DOGE) to ETH, which he labeled “insane.”

DOGE fell by as much as 30% hours after Tesla Inc TSLA CEO Elon Musk hosted “Saturday Night Live” even though he mentioned the meme coin several times during his appearance. At press time, DOGE traded 7.89% higher at $0.55.

See Also: Can Ethereum Hit $5,000 In Six Weeks? A Key Metric Suggest So

Another boost for ETH has come thanks to the Decentralized Finance or DeFi arena. Mark Cuban called Ethereum a platform for smart contracts and said as long as it can executive on its “feature and performance enhancements” it will continue to expand the applications build for it. 

Non-fungible Tokens or NFTs are another driver for Ethereum, which Buterin sees as holding more potential than simply becoming a “casino” for already-wealthy celebrities. 

Photo by Stanley Osorio on Flickr