Ether, the de-facto settlement token of the Ethereum blockchain, rallied on Monday after global payment giant Visa became the ledger’s latest supporter.
The firm, which can handle 24,000 transactions per second, announced that it would offer users the option to settle transactions in Ethereum-based stablecoin USDC, becoming the first major payment services provider to have integrated a dollar-pegged cryptocurrency into its legacy systems.
Crypto.com joined Visa to enable the latter’s stablecoin-focused pilot program. In doing so, the crypto firm would allow Visa to engage in their physical cards, thereby gaining the privilege to settle transactions in USDC in addition to fiat currencies. The partnership would remove the need for users to go through additional asset conversions.
“The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency,” said Visa’s chief product officer Jack Forestell. “And it’s really an extension of what we do every day, securely facilitating payments in all different currencies all across the world.”
Visa’s move followed its withdrawal from a similar stablecoin project — launched by social media giant Facebook — in 2019. The firm decided against integrating “Libra” after Mark Zuckerberg’s foray into the cryptocurrency sector met with skepticism from lawmakers and regulators alike.
Ethereum (aka Ether) surged by more than 5 percent in the early London session, touching an intraday high of $1,782. Part of its gains appeared due to its positive correlation with Bitcoin, the topmost cryptocurrency that also surged above a key resistance threshold of $58,000 on Monday. Meanwhile, more tailwinds for Ethereum came after the Visa news.
The Ethereum blockchain supports 74 percent of the total stablecoins available in the market, compared to only half the dollar-pegged tokens in the previous year. It transacted more than $1 trillion in stablecoins in 2020, with Tether, the most popular but controversial digital dollar, settling $580 billion worth of transfers and generating $385 billion in volumes for the Ethereum blockchain.
As usual, miners benefited the most from Ethereum’s growth as a public ledger for stablecoins and a dozen other industries, including the booming decentralized finance sector. Ethereum’s mining revenue for January 2021 was $830 million, the highest on the calendar. In turn, that raised the appeal for Ether among investors.
Visa’s involvement with a stablecoin backed by Ethereum raised the blockchain’s capability to attract more users to its platform. That partially explains its climb during the European session Monday.
Ethereum Technical Outlook
The ETH/USD now trades inside a symmetrical triangle channel, confirmed by at least two reactive highs on a downward slope trendline and two reactive lows on an upward slope trendline. Coupled with a decreasing trade volume, the pair intends to log a breakout move as it closes towards the Triangle’s apex — the point where the two trendlines converge.
For now, it appears ETH/USD would break bullish, targeting the range above $1,950-2,050. Meanwhile, an upside rejection from the Triangle’s upper trendline would mean a pullback towards the lower trendline, followed by a negative breakout move towards the $1,350-1,470 support area.
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