Summary Points
Here are the key points from the article summarized concisely:
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Price Surge: Ethereum’s price jumped nearly 20% within 24 hours, hitting a two-month high of $2,234, recovering from recent lows around $1,400.
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Pectra Upgrade Impact: The recent Pectra update, launched on May 7, led to a significant reduction in ETH’s annual inflation, turning it deflationary and doubling the daily burn rate.
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Liquidation and Market Activity: Over $280 million in short ETH positions were liquidated recently, marking Ethereum’s best trading day since 2021.
- Tokenization Leadership: Ethereum maintains a dominant position in the tokenization of real-world assets, holding a 58% market share, further catalyzing growth in the stablecoin sector.
Ethereum (ETH) Sees Best Day Since 2021 in 20% Surge
Ethereum prices surged nearly 20% over the past 24 hours, reaching $2,200. This jump marks a two-month high, as ETH climbed from below $1,900 on Thursday morning. Notably, the cryptocurrency peaked at $2,234 during trading in Asia.
Over the last two weeks, ETH gained 26%, and over the past month, it increased by more than 50%. This recovery follows a decline to bear market lows around $1,400. The recent price surge coincides with the successful launch of the Pectra upgrade on May 7.
According to CoinGlass, liquidations of short ETH positions topped $280 million in just one day. Bankless noted this surge as Ethereum’s best trading day since 2021. However, similar price jumps occurred last year, demonstrating this pattern isn’t entirely new. For instance, ETH surged 23% between May 20 and 22, and nearly 30% from November 6 to 10.
Analysts are now optimistic about ETH’s future. ‘MMCrypto’ predicts a potential target of $3,700 if the asset returns to its previous momentum. This optimism aligns with a shift in Ethereum’s inflation rate, which dropped from 0.7% to -0.5% post-upgrade, leading to deflationary conditions.
Cas Abbé, a Web3 growth manager, explained that the Pectra upgrade contributed significantly to the recent price increase. He highlighted how the daily burn rate of ETH has doubled since the upgrade. He noted, “An increase in ETH burn resolves the supply issue, likely boosting demand.”
Ethereum stands as a market leader in stablecoins and tokenization. Anthony Sassano, an Ethereum educator, remarked that Ethereum hosts a significant share of real-world asset tokenization. Currently, it captures 58% of this market, amounting to nearly $7 billion on-chain.
With these developments, Ethereum is positioned firmly at the centre of the cryptocurrency ecosystem, potentially paving the way for broader adoption and use in real-world applications.
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