In the eyes of many institutions and investors, Ethernet Fong is experiencing an "epic breakthrough" (epic breakout).

On Saturday, May 8th, Yi Tai Fong continued its recent rally, with prices exceeding US $3800, an all-time high. On Sunday, May 9, Beijing time, prices in Yi Tai Fong continued to rise.So far approaching4000The dollar mark, at 3954.89.Us Dollar, 24An hourly increase of 12%It has increased by 430% so far this year.

By contrast, Bitcoin prices have hovered between $50, 000 and $60, 000 over the past month. As the price of ethernet hit a new high, the ratio of ethernet to bitcoin is also breaking through the all-time high.

As for the rise in ethernet, JPMorgan analyst Joshua Young said in a report on April 27th, "Why is ethernet winning?" "gives an explanation for the title. Ethernet's valuation may be less dependent on leverage demand than Bitcoin, which is a technical and occasionally important driver, according to the report.

Not long after, Nick Panagirtzoglou, another analyst at JPMorgan Chase, released the latest report on Friday.Acknowledge that "the recent rise of Ethernet Square is particularly remarkable", and explain the logic behind the bullish ethernet place.。

Although the price of bitcoin has recently hovered below $60,000, the overall cryptocurrency market has expanded significantly in recent weeks, led by Ethernet Square and other small cryptocurrencies, according to the report.

The truth is that both retail and institutional demand indicators have accelerated recently. After the launch of four ETF in April, the flow trajectory of funds in Etay Fong has improved. If you compare these indicators with Bitcoin, it looks more impressive.

When it comes to the logic behind the rise of Ethernet Square, Nick Panagirtzoglou mainly comes from six factors:

1Last week, the European Investment Bank (EIB)) issued 1 using the ethernet block chainA two-year zero-coupon digital note of 100 million euros, which is the first time it has issued a digital bond.

The transaction is designed to use a series of bond tokens on the Taifang block chain (bond tokens), investors to buy and pay securities tokens (security tokens) using traditional legal currency. The move by the European Investment Bank is undoubtedly significant, reaching the approval of a mainstream official body for the block chain in Taifang.

2, Canadian Purpose Investments在4月20The first Ethernet Square ETF was launched on Sunday.(ETHH）In the same month, three more ethernet square ETF were launched one after another

3Due to the introduction of EIP 1559 this summerAccording to the agreement, there has been a structural decline in the supply of Tai Fong.

The main purpose of the EIP 1559 protocol is to greatly change the calculation method of transaction costs, and to make the transaction costs on the Ethernet block chain more predictable by introducing a basic fee that can be calculated automatically. According to the JPMorgan Chase report, once it is used to pay for Tai Fong, the fee will be burned immediately, which means that the supply of Tai Fong will be reduced in the future.

With the circulation of Yi Tai Fong growing at an annual rate of 5% over the past three years, the theoretical unlimited supply of Yi Tai Fong has been a concern. By burning Ethernet Square at the base cost, the EIP 1559 agreement may reduce the annual change in the circulation of Ethernet Square to 1-2 per cent.

4Investors' response to ESGHas shifted attention from the energy-intensive Bitcoin blockchain to the etherfang blockchain, which is expected to be etherland 2.0Will be in 2022It becomes more energy-efficient at the end of the year.ETaifang 2.0 has changed from an energy-intensive "workload proof mechanism" (Proof-of-Work validation) to a "equity proof mechanism" (Proof-of-Stake). As a result, it takes less computing power and energy to maintain the ethernet network.

5. The rapid growth of NFT (Non-Fungible Token, non-homogenized tokens) and stable coins in recent months has increased the use of collapsible landslides, and Etay Fong has dominated the DeFi (decentralized Finance) ecosystem.

6. The final report mentioned that higher US bond yields and the eventual normalization of monetary policy are working together to put downward pressure on Bitcoin, the digital gold. Ethernet derives value from its applications, from DeFi to games, from NFTs to stable coins, so it is not as vulnerable to higher real returns as bitcoin.

But the report also warns of potential risks. The market capitalization expansion of the cryptocurrency market over the past few weeks has focused on ethernet and dogcoin, and the share of bitcoin in the cryptocurrency market has fallen from 60 per cent to 45 per cent in the past month.

Panigirtzoglou believes that this share decline is partly due to increased institutional interest in ethernet, but also driven in part by individual investment demand for other cryptocurrencies. This bears some resemblance to the bubble in the bitcoin market in December 2017, when its market share fell from 55 per cent to 35 per cent.

ZeroHedge noted that some people disagree with this view, and that at the beginning of some people who experienced a fall in bitcoin in 2018, the situation had nothing to do with retail investors, but with the Fed's tightening policy-raising interest rates three times in 2017 and four times in 2018.

In other words, a big difference between now and then is the Federal Reserve, which has no plans to cut QE or raise interest rates. If you really want to make comparisons with the Fed's last rate hike cycle, cryptocurrencies such as Bitcoin and Ethernet Square may not peak until 2024.