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 institutional hype
Ether hitting $2,000 for the first time ever follows the launch of CME ETH 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 ETH to decline significantly, because the CME Bitcoin futures listing in 2017 coincided with the local BTC top at the time.
However, ETH has continuously rallied since, breaking past its all-time high and surpassing $2,000 on Feb. 20. The new milestone indicates that there is currently significant institutional hype around ETH, which is also evidenced by Grayscale’s Ethereum Trust resuming the buying of ETH in February.
Explosive growth of DeFi
According to data from Dappradar.com, the total value locked (TVL) of the 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