Ethereum, the world’s second largest cryptocurrency, surged above $ 4,000 for the first time
In 2021, Bitcoin and ether have seen major rallies. In April 2021, the cryptocurrency market reached over $ 2 trillion for the first time.
Jaap Arriens | NurPhoto | Getty Images
LONDON – Ether surged above $ 4,000 on Monday to hit a new record high. This was an impressive rally for the second largest cryptocurrency in the world.
According to Coin Metrics, Ether, the digital token on the Ethereum blockchain, rose nearly 7% in the past 24 hours to $ 4,141.99 by 3:40 a.m. ET. It now has a total market value of $ 476.3 billion, less than half of Bitcoin’s $ 1.1 trillion.
In the shadow of Bitcoin, ether has seen parabolic gains lately as investors seek returns on other cryptocurrencies. Bitcoin fell over 2% in April while ether rose more than 40%. According to CoinMarketCap, the entire crypto market is currently valued at over $ 2.5 trillion, which can be attributed to the growing interest in the area.
Mainstream investors and some corporate buyers like Tesla flocked to Bitcoin earlier this year, viewing the digital coin as a potential inflation hedge, as central banks around the world print money to relieve coronavirus-hit economies. Large Wall Street banks like Goldman Sachs and Morgan Stanley have also tried to provide Bitcoin exposure to their wealthy clients.
However, some investors are still not buying the crypto craze. Michael Hartnett, chief investment strategist at Bank of America Securities, said the Bitcoin rally looked like the “mother of all bubbles” while Stephen Isaacs of Alvine Capital said there was “no basis for this product, period”.
Ethereum versus Bitcoin
The Ethereum network was founded in 2013 by Vitalik Buterin and a variety of other software developers and enables people to create applications based on it. Ether is the network’s home currency.
Bitcoin and ether are similar in that they are both digital currencies. But they have their differences.
While Bitcoin is viewed by its proponents as a gold store similar to gold, Ethereum aims to create a kind of decentralized internet that is not maintained by any central authority.
It is the foundation of an increasingly popular trend in cryptography known as “decentralized funding” that aims to restore traditional financial products using blockchain technology, the distributed computing system that underlies many cryptocurrencies.
Ethereum is also benefiting from the emergence of NFTs, or non-fungible tokens, digital assets designed to represent ownership of unique virtual items such as art and sports memorabilia. Many NFTs like CryptoKitties and CryptoPunks run on Ethereum.
However, this boom in activity has caused congestion on the Ethereum network. Ethereum is currently in an ambitious upgrade that theoretically enables faster transaction times and reduces the performance required to process transactions. Both Bitcoin and Ethereum have generated criticism from environmentalists about the impact of crypto mining on the climate.