Ether (ETH), the second-largest cryptocurrency by market capitalization, went above $3,000 Sunday for the first time in history.
At press time, ether’s changing hands at $3,085.97, up more than 5.6% in the past 24 hours.
Ether’s impressive gains came as the demand for digital currency has soared.
The total market capitalization for decentralization finance (DeFi) recently hit above $100 billion, with some of the most popular DeFi projects built on the Ethereum blockchain.
Currently, there is more than $68 billion worth of value locked in DeFi. CoinMetrics data shows the number of active addresses recently surged to a new all-time high of 771,000, surpassing the previous record of 739,000 set in November.
The daily transaction count on Ethereum’s blockchain has increased by 22% to 1.376 million this year.
Ether’s growth also came as the Ethereum blockchain undergoes the Eth 2.0 upgrade, which will switch the Ethereum blockchain to a proof-of-stake (PoS) consensus from the current proof-of-work (PoW) consensus mechanism.
Ethereum founder Vitalik Buterin gave a presentation recently on the development roadmap of Ethereum after its merge to PoS, including the long-awaited feature, sharding.
Sharding will expand Ethereum’s capacity to process transactions by splitting its database into 64 new mini-blockchains, thus addressing the congestion issues that currently plague the blockchain.
Bitcoin Follows Ether’s Gain Amidst Growing Support
Bitcoin, the largest cryptocurrency by market capitalization, has also soared 3.79%, exchanging hands at $58. 765.21 as at 10.30 A.M East African Time.
Bitcoin is yet to recover from the blow it took last month, trading below $ 50K shortly after reaching a record high of around $64K.
However, data from coinbase shows more investors are willing to invest in the crypto markets despite the high volatility and high regulatory scrutiny.
Recently, a luxury hotel in Lagos, Nigeria, announced they would accept Bitcoin (BTC) as a form of payment and adopt the digital asset as its primary reserve currency as concerns about inflation continue to grip Africa’s largest economy.
“We have allocated around 50% of our cash reserves to Bitcoin. […] We hope to increase that as time goes on, bitcoin is the currency of the future and it is only right that we are strongly positioned so we do not get left behind. Bitcoin permits our guests a faster and more secure way to enjoy the comfort we offer. Our residents desire simplicity, and we are excited to be able to offer that to them.” ‘Yanju George, the company’s CEO.
Nigeria’s inflation rate recently peaked at 17.33%, the highest since February 2017, as the economic impacts of COVID-19 and a weakening local currency continue to take their toll.
High inflation rates are among the reasons why Nigeria has become the bastion of crypto adoption in Africa. Since 2015, Nigerians have traded over 60,200 BTC on Paxful, a crypto peer-to-peer trading platform, second only to the United States.
However, the legal status of cryptocurrencies is being disputed in Nigeria after the central bank banned financial services companies from servicing digital currency exchanges. However, Adamu Lamtek, deputy governor of the Central Bank of Nigeria, later clarified that the regulator didn’t ban Nigerians from trading or holding cryptocurrencies.
Additionally, Former Ethereum Co-Founder, Founder of Cardano and CEO of IOHK, Charles Hoskinson, announced the launch of an enterprise blockchain framework Atala to provide financial services to billions of people living in African countries.
Atala will first be used in collaboration with the government of Ethiopia to develop a new cryptocurrency to provide a secure and dependable means of payment for the nation’s capital.
While Ethiopia’s government will be one of the first to use Atala, the framework will also be introduced in other African countries that lack legacy infrastructure, with a focus on enabling a new smart economy.