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- Insights
- Cryptocurrencies
- Stocks
- White Papers
- Industry
- Geography
Ethereum is one of the biggest cryptocurrencies and comes only second to Bitcoin, based on market capitalization and daily trading volume. It has outperformed several major cryptocurrencies this year and is one of the biggest rivals of BTC. According to coinmarketcap, ETH's market cap is standing at US$4.93 billion, but in the past few weeks, Ethereum's price has been bolstered due to several reasons.
Ethereum, which runs on a technology system called the Ethereum blockchain, is almost ten times the price it was when it bottomed during the Covid period due to market panic in March 2020. The cryptocurrency is only five years old and has shown remarkable growth potential since its inception. Experts believe that this remarkable rise in the value is due to the excess money flowing into all the leading cryptocurrencies in the market, as digital currencies are now envisioned to be relatively safe store-of-value assets and a good speculative investment.
In May 2021, ETH broke all records to set new all-time highs that crossed the US$4,000 mark. This was the first time Ethereum had ever crossed the US$3000 mark in its history. In early May, when the price value still stood at US$3,100, market researchers and crypto analysts revealed that they thought Ether would continue rising, and it did! They also believed that with the rising investor speculations about the crypto's several improvements and new features being rolled out over the next few months, Ether might soon overtake Bitcoin in the future.
Ethereum's rise in 2021 has even outperformed the best and the most trusted cryptocurrency of the market, Bitcoin, which only has had a 7-fold increase since March. Over the year, BTC only witnessed a 97% surge in its value, and after the massive price rally, crossing the all-time high of US$65,000, the crypto has fallen back to its original course. Whereas, in the last week of September, ETH's price again saw a massive surge of nearly 10%, which was a great achievement for the crypto since May. Even though its price did crash in the months between, its losses were recouped soon enough.
Experts believe that Ethereum and most other major cryptocurrencies follow Bitcoin as its price rises and goes down. Over the past year, due to the pandemic, BTC saw massive gains while Ethereum just lagged. ETH's price surge was just the crypto catching up with the gains of Bitcoin. Additionally, the growing popularity of the DeFi features on the Ethereum blockchain is also one of the major reasons why investors are so attracted to Ethereum.
Besides, the crypto has been developing many updates to its software and has plans to introduce the ETH 2.0, an update that is all set to be introduced at the end of this month or in the early 2022. This upgrade will provide exciting features like lower fees and faster transactions. This upgrade has the investors further intrigued about its growth potential. The rise in Ether is also partly due to institutional adoption, as more and more investors are looking forward to using ETH as a store-of-value.
All cryptocurrencies other than Bitcoin are called altcoins. With the crypto market crashing recently and the prices of Bitcoin witnessing heavy turbulence, investors are quickly switching from Bitcoin to other profitable altcoins.
But the market for altcoins is nascent. The number of coins listed in the cryptocurrency market has multiplied in the past decade and has attracted a horde of retail investors, who are wildly betting on their price movements to amass short-term profits. Thin markets and absence of regulations produce quicksilver violations in altcoin valuations.
Currently, the altcoin market is for investors who are willing to take on the outsized risk of operating in an unregulated and emerging market that is prone to volatility. They should be able to handle stress resulting from massive price swings. For such investors, the cryptocurrency markets can offer great returns.
Ethereum is perhaps the biggest altcoin in the market, however, there might be a disagreement over whether it really classifies as one due to its raging market cap. Ether acts more like a platform token than a coin. It solves the age-old problem of speed. As a BTC transaction takes nearly 15 minutes, ETH can do the same in almost 15 seconds. ETH can only impact the entire altcoin landscape if it overtakes Bitcoin, which might eventually happen in the future.
The bigger question to ask right now is what will happen to the entire crypto landscape if Ether overtakes BTC. As Bitcoin has shown that first-mover advantage matters in cryptocurrency, and despite BTC's lack in providing any stimulating features, it has gained the title of the largest cryptocurrency in the market. But it is unlikely to stay so. Then, probably Ether will rise to showcase its true market potential to the global investors.
