The Ethereum price experienced a strong pump yesterday as many investors fled to crypto blue chips in order to escape the perils of trusting third parties.

Major stablecoins lose their peg

One of the most significant reasons for people to be accumulating ETH at the moment is the fact that many people in the industry have now lost faith in the stablecoin industry.

Over the weekend, many stablecoins lost their $1 peg thanks to the banking turmoil. USDC had $3.3bn of their $40bn in reserves held in the Silicon Valley Bank, and the value of USDC subsequently fell from $1 to $0.90.

USDC wasn’t the only stablecoin impacted in this mess, with DAI, FRAX and MIM also following suit. This was particularly concerning in the case of DAI since many industry participants believed that DAI would be more resistant to such shocks, but the high degree of USDC backing has exposed DAI as being little more than a USDC derivative.

Where could the Ethereum price go next?

The price of ETH appreciated by over 10% during the last 24 hours, as many people have been choosing to sell their stablecoins in order to buy an asset that has significantly less counterparty risk.

Many analysts such as Ivan Liljeqvist believe that the value of ETH could appreciate well past $10,000 in the coming years thanks to these catalysts, as well as the value proposition that Ethereum has in replacing the current financial system.

There is some concern for ETH holders over the coming months, however, particularly given the fact that Shanghai hard fork will open the door for millions of ETH to be unstaked and sold onto the market.

Those who are concerned about such risks would be better advised to allocate to Bitcoin, where the future circulating supply is always known.

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