In recent weeks, the one factor that prevented analysts from considering a new bull run was starting across cryptocurrency assets like Bitcoin and Ethereum, was a lack of new money entering the market.
However, a premium on Ethereum prices on Coinbase suggests that fiat inflow has begun pouring into the exchange, and could cause an explosive rally in the weeks ahead.
Ethereum Trades at a Premium on Coinbase Over Tether Exchanges
There’s been no denying that all systems appear to be ready to go for the next crypto bull run. Bitcoin is showing a number of bullish factors, and Ethereum is already doubled in value year to date.
However, many top crypto analysts and whales across the industry have been skeptical of the recent bull rally, claiming that no new money had been entering the crypto market for some time.
Related Reading | Surging Ethereum Volume While Price Skyrockets Is Major Bullish Sign
But as the rally pushed prices higher and higher, it may have incited an extreme case of FOMO across retail investors.
The surge in interest surrounding cryptocurrencies like Ethereum once again is causing the number two cryptocurrency by market cap to trade at a premium on Coinbase over other platforms.
Coinbase is among the main fiat gateways that crypto investors use to enter the market. From there, oftentimes they send their cryptocurrencies to other platforms to trade, but Coinbase remains the king of retail crypto buying.
Because Coinbase is a fiat gateway, when fiat begins pouring in, the price of Ethereum, Bitcoin, or other crypto assets begins to trade at a premium over exchanges that feature these crypto-assets and altcoins paired with Tether – a dollar-pegged stablecoin.
The rising demand for crypto assets trading against the dollar creates a divergence between different platforms.
Will the Return of Fiat Inflow Spark the Next Major Bull Run?
At the start of the recent Ethereum rally, prices can be seen pretty much in parity across Coinbase and Binance – a USDT paired exchange.
When the first major peak arrives, the premium begins tipping in favor of Coinbase. By the time the second peak rolls around, the premium has risen to over $1.50 per ETH token.
At the highest point of the move currently – which may or may not be the top of the rally – the premium remains but has dwindled slightly back to just a $1 discrepancy.
Whether this suggests the buying momentum is beginning to wane, or if its just another pit stop before a stronger move higher, is anyone’s guess.
What is for certain, is that Ethereum has been trading at a premium on Coinbase, and if it really does signify the return of fiat inflow to the crypto market, it could be the spark that ignites the next major bull run.