The price of Ether ETH, the native cryptocurrency of the Ethereum blockchain network, has been soaring since the beginning of the new year. Whats more, it has outperformed Bitcoin BTC since Jan. 1, gaining roughly 81 compared to Bitcoins 26 in their respective USD pairs yeartodate.
There are three main reasons why ETH has been outpacing BTC throughout the past several days. The factors are Ethereums accelerating growth, the improving sentiment around DeFi and BTCs current period of relatively low volatility.
DeFi tokens have been surging rapidly as of late, led by majors such as Aave and SushiSwap, as Cointelegraph reported.
The rally of DeFi tokens is partly fueled by the fastgrowing total value locked TVL of the DeFi market, which estimates the amount of capital deployed to DeFi protocols.
At over 24 billion, there is more capital locked across DeFi protocols than ever before, which signals massive demand. This is crucial for the momentum of Ethereum and consequently its Ether token because more and more apps and tokens rely on its network.
The rising number of users is shown by the massive uptick in Ethereum gas fees. Although high transaction fees are not ideal, Jacob Franek, a partner at DeFi alliance, said this is a positive factor because it shows the willingness of users to pay, indicating genuine demand.
Other layer one blockchain protocols are growing with significant anticipation to compete against Ethereum, like Polkadot and Cosmos.
However, in the…