Due to the increasing price of Bitcoin, the whole crypto market is seeing a rapid inflow of investments from FOMO-ridden investors. In the past week alone, the crypto market has grown by 5.41% and currently sits at $1.08 trillion.
The trickle-down effect has also affected Ethereum, which has grown by 4.56% in the past 24 hours alone. The popular cryptocurrency has gained 9% in one week.
The Reason Behind the Rapid Price Increase
In addition to the general factors causing expansion in the whole crypto market, there can also be other factors causing Ethereum to increase rapidly in value. This time around, the price increase was caused because of the buying activity of an Ethereum whale, who bought a massive quantity of Ethereum in a short time.
Before the buying spree, the whale (flagged as Ali_charts) had around 10,000 Ethereum tokens in their wallet. However, they’ve added 400,000 ETH tokens to their wallet because of the recent Ethereum price dip.
The whale has bought around $600 million worth of Ethereum in a few transactions. This is one of the main reasons behind the rapid price increase of Ethereum.
It isn’t new for crypto whales to invest this much into a cryptocurrency of their choice. Big whales investing in Ethereum shows the interest of High Networth Individuals (HNIs) in Ethereum besides Bitcoin.
Due to various factors, many experts have labelled the recent downs and ups in the crypto market as fake bullish growth.
After the collapse of Silvergate bank, the Signature bank was the only cryptocurrency-friendly bank in business. The recent closure of Signature bank indicates a deliberate attempt by the US authorities to sabotage the crypto market.
Due to the ongoing crackdown on the crypto market by the US and UK authorities, the prices of cryptocurrencies were rapidly decreasing.
Because of the downtrend, some investors saw the opportunity and invested huge amounts of money in cryptocurrencies like Ethereum to give the market a boost. However, this boost might be temporary.
On the contrary, many experts also consider this trend the start of the next big bull run in the crypto market. The large-scale investment in Ethereum has intrigued many investors to invest in ETH, and the price of the popular crypto is rapidly increasing.
Moreover, it is also notable that the buying spree comes immediately after the closure of Signature bank and Silicone Valley bank. The banks were some of the biggest venture capital investment banks focusing directly on crypto-related projects.
While the closure of these banks sent shockwaves throughout the crypto community, the rapid round of investments after that provided traders with some reassurance.