Four Main Factors That Explain 3,000 Percent Rally of Ethereum in 2017
Ethereum unit price grew from $8.52 to $269.36 in 2017 - here is why.
The Ethereum spring continues. From a unit price of $8.52 in the beginning of the year, Ethereum reached its all-time high this week, topping at an incredible $269.36 per unit. The price is up by over 3,000 percent since January 2017.
This week, Ethereum traded at an all-time high of $269.36, according to data from WorldCoinIndex. It has stabilized slightly below that price since June 6. The figure below retraces its 3,000 percent growth since the beginning of 2017.
Many factors have led to this record rally, which fit pretty well in the quadriptych of the EEA, ICOs, South Korea and Russia.
The creation of the Enterprise Ethereum Alliance (EEA)
In March 2017, Blockchain startups, research labs and global companies announced the creation of the Enterprise Ethereum Alliance (EEA). The goal of this alliance is to collectively develop industry standards and encourage collaboration between its various members.
The EEA now counts hundreds of members, among which include Microsoft, Intel, J.P. Morgan, Deloitte, Accenture, ING, ConsenSys and the Toyota Research Institute. The alliance is seeking to work on common projects and contribute to the future of the Ethereum permissionless Blockchain by focusing on its scalability, privacy and confidentiality.
Julio Faura, chairman of the EEA, says:
“The enthusiasm around EEA is remarkable. Our new members come from varying industries such as pharma, mobile, banking, automotive, management consulting, and hardware as well as the startup community driving innovation. It’s great to see everyone come together and build the next generation of our economy on Ethereum blockchain solutions.”
Such an initiative is without a doubt giving legitimacy to Ethereum, and played a role in its recent rally.
The boom of ICOs
Initial Coin Offerings (ICOs) are a new way for Blockchain startups to raise millions of dollars in short periods of time, by selling custom tokens. This type of offering has flourished without a legal or regulatory framework, and it is perhaps exactly what made it so attractive.
Smith + Crown is a Blockchain consulting firm that tracks ICOs and their achievements. According to the firm, ICOs raised $101 mln in 2016. Since the beginning of 2017, the total amount raised has passed the $300 mln bar, which represents a near 200 percent increase in less than six months.
Many of the recent initiatives in this field are based on the Ethereum Blockchain due to its smart contracts capabilities, and thus, ICOs use Ether tokens and, therefore, contribute to raising the unit price of ETH.
South Korea an Ethereum powerhouse
South Korea’s three largest digital currency exchanges have integrated Ether, making it the largest Ethereum exchange market with a $335 mln daily trading volume. Since then, and over the past few months, the country accounted for around 38 percent of the total trading volume of Ethereum.
The sudden interest in ETH from South Korea is so strong that the ETH/KRW pair processes more trades than the ETH/BTC pair, which used to account for over 50 percent of all Ethereum trading.
Vladimir Putin meets Vitalik Buterin
At Cointelegraph, we recently commented on this historical meeting. Even though not many details have been revealed following it, we do know President Vladimir Putin is ready to support the development of Blockchain technology.
This interest has been further confirmed by referring to this meeting on the Kremlin’s website and through its Press Secretary. These are, in my opinion, the four main factors that altogether drove the price of Ethereum to its all-time high this year. What will come next?