Wednesday, the cryptocurrency ether (quotation ETH) by Ethereum set a new record among general expectations that the recent GameStop (GME) trading saga is accelerating the mass adoption of cryptocurrencies and decentralized finance (DeFi).
The recent retail trading frenzy is causing the price of ether to soar
The second largest cryptocurrency by market value broke the $ 1.500 price threshold, reaching $ 1.571,05 on Wednesday, surpassing the previous record price of $ 1.459,93 last month.
In the past few weeks, ether appears to have stabilized around $ 1.200. The current momentum towards the new high has come in the wake of the recent turmoil in equity markets, where brokerage platforms such as Robinhood have restricted transactions to curb volatility fueled by the coordinated buying of stocks like GameStop by Reddit retail traders. .
The community-induced retail trading frenzy of Reddit r / WallStreetBets forced hedge funds to withdraw short positions in GameStop, leading to a 1.700% price increase in 17 days, through January 28th. What used to be an action aimed at the GME stock soon extended first to other stocks, and subsequently to other asset classes such as cryptocurrencies.
The GameStop case opens the door to mass adoption of cryptocurrencies and DeFi
Industry analysts believe that measures limiting activity for stock traders could bring more users into the DeFi space, which is dominated by the Ethereum blockchain.
"With the investment and trading platform Robinhood disrupting trading of certain stocks such as GameStop and Nokia (NOK), and Nasdaq President and CEO Adena Friedman calling for regulations to prevent retail investors from coordinating on social media, cryptocurrencies they just get stronger, ”said head of trading at NEM Group, Nicholas Pelecanos.
According to Messari's Ryan Selkis, the door for mass adoption of digital assets such as bitcoin, ethereum, DeFi and Web 3.0 has been wide open. Ether also has a fascination as a store of value, and a growing number of institutions have decided to invest in cryptocurrency, according to Coinbase's recently released 2020 annual review.
As ether reached a new high, bitcoin is down nearly $ 6.000 from its record price of $ 41.962 reached on Jan.8. Bitcoin has grown by around 18,59% this year, while ether has gained more than 97%.
As of press time, the cryptocurrency ether has a market capitalization of $ 175 billion, second only to Bitcoin which has a capitalization of $ 672 billion, according to Messari.
