It’s a real shame that some investors simply gave up on their Ethereum (ETH) holdings during the worst possible time. The recent rally in ETH is a textbook example of sticking with an investment through thick and thin when you believe in the idea behind it.
In the case of Ethereum, the idea is to develop a currency that offers digital-ledger technology that companies can use to build new and innovative programs.
It’s an exciting idea, but not everyone’s ready to buy into it. Regulators in particular have been slow to understand Ethereum’s technology, not to mention embrace it.
Nonetheless, the price is testing all-time highs and that’s certainly bullish. And perhaps with a key regulator giving cryptocurrency its due consideration, the runway to higher prices can finally be cleared.
A Closer Look at Ethereum
To give you a snapshot of how far the ETH price has come, we can observe that it reached $1,246 on the afternoon of Jan. 22. It certainly wasn’t trading that high a year ago. Throughout January of 2020, the price was consistently below the $200 level.
Moreover, last March when the global economy was wracked by the Covid-19 pandemic took hold, the currency touched a painful 52-week low price of $95.18 as investors dumped just about everything in order to raise cash.
That was a temporary crisis, however. Slowly but surely, Ethereum worked its way back up throughout 2020. By the end of the year, the price had reached $730.
At that time, surpassing the $700 level was undoubtedly an amazing comeback. Yet, the tale certainly didn’t end there as ETH shot up to a 52-week high of $1,432.30 in January.
There was a pullback after that, but the overall trajectory is still to the upside. At the very least, the bulls can say that they’ve pierced the previous high mark from January 2018.
Yellen Returns
With a new presidential administration typically comes a host of new faces in key government positions.
Interestingly enough, however, President Joseph Biden is bringing a familiar name back into the government. Of course, I’m referring to U.S. Treasury secretary nominee Janet Yellen.
Yellen served as the U.S. Federal Reserve chair from 2014 to early 2018. She’s not a newcomer to the government, and perhaps there’s been some fear among cryptocurrency traders that she would have a decidedly old-school viewpoint on crypto.
Since she will be the presumptive Treasury secretary, we can assume that Yellen will serve as a major regulatory force in the U.S. financial domain. She could make life easier or harder for Ethereum holders.
This, then leads us to the billion-dollar question: should investors fear Yellen as Treasury secretary?
Surprising Statements
Can a seasoned government official learn and grow along with the cryptocurrency market? Actually, the answer might surprise you.
During the United States Senate Committee on Finance’s hearing on Yellen’s nomination as Treasury secretary, a member asked Yellen about the benefits and threats surrounding cryptocurrency. Specifically, whether it should be regulated differently.
Ethereum investors worldwide might have held their breath while waiting for Yellen to respond. Yet, her reply reflected a perhaps unexpectedly nuanced understanding of cryptocurrency.
“I think it important we consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system,” Yellen said. “I think we need to look closely at how to encourage their use for legitimate activities”
That’s not her entire response as Yellen also acknowledged the potential for cryptocurrency’s criminal applications.
Plus, Yellen also offered to “implement an effective regulatory framework” for cryptocurrency. Only time will tell how that pans out.
Still, it’s highly encouraging to see Yellen acknowledging the benefits of cryptocurrency and its potential to improve the financial system. That’s net bullish, I would assert, for Ethereum in 2021.
The Bottom Line
We shouldn’t get ahead of ourselves and assume that Yellen will become a champion for crypto coins.
Nevertheless, as Ethereum tests new highs, some measure of hope is appropriate as even seasoned regulators can consider new ideas.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
