Ethereum has set a new record-high price on Tuesday, reaching $4,470 to push the entire crypto market to beyond $2.7 trillion for the first time.
It further soared on Tuesday night, trading at $4,590.15--which is a 6.42 percent increase in the last 24 hours as of this writing, Coindesk reported in its real-time tracker.
Ethereum's rise is attributed to a notable surge in the use of its blockchain, particularly in its long-held strength in supporting decentralized finance (DeFi) apps and transacting non-fungible tokens (NFTs). But what makes it even more attractive to investors is the expectation that Ethereum will become a fundamental cryptocurrency in the emerging metaverse being built by tech giants like Meta (formerly Facebook).
Ethereum Price Rally Powered by Adoption of Dapps, NFTs, Gaming
Experts noted that ETH is far more interesting than the other cryptocurrencies, given that the blockchain is the leading smart contract platform. This means it will hugely benefit from a growing adoption of decentralized finance apps (dapps), NFTs and gaming.
Decentralized app store DappRadar co-founder Dragos Dunica told The Independent that he won't be surprised if ETH would hit $10,000 before Christmas.
Aside from Ethereum, other cryptocurrencies reached record-breaking highs, including Polkadot and recently, Bitcoin.
On Tuesday, Polkadot is trading at $50.75, a 4.21 percent increase in the last 24 hours, while Bitcoin surged 3.81 percent to reach $63,221.67, Coindesk further posted.
The increase of the trading price came after the forecasts from leading crypto analysts said that Bitcoin and the rest of the crypto market would hit a record breaking conclusion to 2021.
Ethereum Price Prediction: $8000 in December Possible, Says Goldman Sachs Strategist
In the near term, Ethereum is expected to jump 80 percent to $8,000 in December, if it keeps tracking inflation expectations, according to a leading financial strategist.
Goldman's global markets managing director Bernard Rzymelka said in a Business Insider report that cryptocurrencies, such as Ethereum, have closely tracked inflation in recent years. Rzymelka noted that he discovered a strong correlation between the Bloomberg Galaxy Crypto Index and a market-based gauge of inflation expectations.
Rzymelka said ETH has tracked inflation markets quite closely, with the strategist adding that the asset is pro-cyclical, meaning that the coin's price tends to increase when the economy emerges better. Because inflation expectations have surged, Ethereum would most likely have a sharp rise as well.
With Ethereum's record highs on Tuesday, Goldman Sachs indicated that the cryptocurrency market could become exhausted or hit the commencement of an "accelerating rally."
Rzymelka also noted a chart showing the possible direction of Ethereum, wherein it could possibly skyrocket to $8,000 by the end of 2021.
However, Goldman Sachs warned that central banks would not allow inflation to make a steady rise. Should ETH continue to follow inflation expectations, a surge would come before a "longer-term market top ahead."
Despite this, however, many institutional investors remain cautious, insisting that cryptocurrencies such as Bitcoin and Ethereum are too volatile to include in their financial portfolios.