Ethereum price: Why Ether is taking off

Ethereum price: Why Ether is taking off

There are two very real reasons Ethereum is taking off

Market Wrap: ‘Ethereum Killers’ Pop as ING Report Highlights Ethereum Over Bitcoin

The tokens of the Ethereum blockchain’s competitors are making huge gains Thursday, while ether set a new price record above $3,600.

Bitcoin has less than 10% of gold’s market capitalization but could continue to differentiate itself from the yellow metal and grow its piece of the total market-cap pie.

Ether (ETH) trading around $3,483 as of 21:00 UTC (4 p.m. ET). Gaining 0.28% over the previous 24 hours.

Ether’s 24-hour range: $3,397-$3,607 (CoinDesk 20)

Ethereum Classic (ETC) trading around $148 as of 21:00 UTC (4 p.m. ET). Gaining 50% over the previous 24 hours.

Eos (EOS) trading around $12.29 as of 21:00 UTC (4 p.m. ET). Gaining 48% over the previous 24 hours.

Cardano (ADA) trading around $1.59 as of 21:00 UTC (4 p.m. ET). Gaining 9% over the previous 24 hours.

Bitcoin (BTC) trading around $56,161 as of 21:00 UTC (4 p.m. ET). Losing 1.6% over the previous 24 hours.

Bitcoin’s 24-hour range: $56,586-$58,266 (CoinDesk 20)

Big-time gainers Thursday included tokens associated with blockchain projects that aim to replicate some of the key attributes of Ethereum, mainly programmability.

Subscribe to , By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy

In the past month, ethereum classic (ETC) has gained over 1,250%, while cardano (ADA) has jumped 238% and eos (EOS) is up 42%, according to Kraken spot data provided by charting software TradingView.

The gains come as the giant Dutch bank ING used a recent report to throw some support behind the notion of programmable money used for decentralized finance, or DeFi.

“The recent bull run of ETH has shed some light on competing projects to the Ethereum value proposition, which can be bundled into a category that we can call a ‘sector,” said Elie Le Rest, partner at trading firm ExoAlpha. “The crypto market tends to work on comparable principles, meaning that if a coin of a ‘sector’ has been doing great, such as ETH in the ‘layer 1 sector,’ then other coins of this same sector may follow a similar trend.”

Performance of ETC (green), EOS (Black) and ADA (Blue) the past month. Source: TradingView

Layer 1 refers to blockchains that can serve as the foundation for various programming languages to create applications, known as smart contracts, that perform financial functions. Ethereum is a layer 1 smart-contract blockchain; ETC, ADA, and EOS are similar.

A Wall Street Journal article published Thursday highlights that retail investors are searching for value coins. Ethereum classic may no longer fit that bill, currently priced around $130, according to CoinDesk 20 data, but cardano priced at around $1.63 and eos at a little over $12 certainly do.

“Interest has flowed out of bitcoin and into [altcoins] for the time being. People are looking further out the risk spectrum for returns,” noted Ciaran Neilan, an executive at crypto market maker GSR.

Bitcoin market dominance the past four years. Source: TradingView

Bitcoin’s dominance, its share of the greater cryptocurrency market cap, is one sign of a loss of interest for the world’s oldest cryptocurrency. As of press time, BTC dominance, according to chart provider TradingView, was at around 45%, a low not seen since July 2018.

During the last bull market, at the start of 2018, bitcoin’s dominance dumped to an all-time low of 35% as investors redeployed their bitcoin gains into alternative cryptocurrencies.

Early this year, bitcoin dominance went as high as 72%. GSR’s Neilan said that dominance percentage will likely return. “It will end how it usually does,” Neilan said. “BTC consolidates, then takes back the headlines.”

Institutional interest, price of ether higher than ever

Ether’s hourly price chart on Bitstamp since May 3. Source: TradingView

Ether (ETH), the second-largest cryptocurrency by market capitalization, hit a fresh high Thursday of $3,607 at around 17:30 UTC (12:30 p.m. ET), according to CoinDesk 20 data. The price has settled on some heavy selling, but still gained 0.28%.

The European Investment Bank (EIB) issuance of a $121 million bond on Ethereum as another sign of institutional support for the ether ecosystem.

“I think ether has benefited from the recent Berlin upgrade,” Jean-Marc Bonnefous, managing partner at investment firm Tellurian Capital. “For once we have a new all-time high and lots of DeFi activity without a simultaneous explosion of gas [transaction] fees.” The EIB bond issuance could be another sign of institutional support for the ether ecosystem, he said.

Ether futures open interest the past month. Source: Skew

In the ether derivatives market, ETH futures are now at $10 billion – an all-time high. More sophisticated investors are entering the market and requiring more complex instruments. In the past month, open interest in ether futures has climbed by 47% across major venues.

“I think we’re just getting started,” Stefan Coolican, chief financial officer for investment firm Ether Capital, told CoinDesk. “The addressable market for ETH is almost infinitely larger than bitcoin.”

Bitcoin-gold correlation dumping

Bitcoin’s hourly price chart on Bitstamp since May 3. Source: TradingView

The price of bitcoin was down Thursday, going as low as $56,586 around 08:15 UTC (3:15 a.m. ET).

The trading range was even tighter than the day before. Thursday’s $56,586-$58,266 spot price variance was narrower than Wednesday’s $53,633-$57,356 range. BTC is below the 10-hour moving average and the 50-hour on the hourly chart, a bearish signal for market technicians.

“We’re seeing BTC almost completely flat while ETH has pumped,” noted Andrew Tu, an executive at quant trading firm Efficient Frontier.

“I don’t think this is the last we’ve heard from bitcoin, perhaps just a breather on its march to gold’s market cap,” Coolican said. Bitcoin’s current market capitalization is over $1 trillion, according to CoinGecko, versus gold’s more than $11 trillion.

The correlation between the two assets, according to data aggregator Coin Metrics, is near zero, which means their prices are no longer moving in sync as they were for most of last year. In October, the metric passed 0.6. A 1 would signify perfect synchronicity.

Bitcoin-gold correlation the past two years. Source: Coin Metrics

Mostafa Al-Mashita, vice president for trading at quant firm Efficient Frontier, says he’s ready for the return of BTC action.

“Another leg up for bitcoin is not expected anymore, which is why it’ll likely happen,” Al-Mashita told CoinDesk.

Read More: Bitcoin Options Traders Leaning Bearish Despite Price Recovery

Other markets

Digital assets on the CoinDesk 20 are mostly higher Thursday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

Notable losers:

Equities:

Commodities:

Oil was down 0.61%. Price per barrel of West Texas Intermediate crude: $64.84.

Gold was in the green 1.6% and at $1,815 as of press time.

Silver is gaining, up 3.2% and changing hands at $27.32.

Treasurys:

The 10-year U.S. Treasury bond yield fell Thursday to 1.570 and in the red 0.11%.

Move over Bitcoin! Ethereum prices are rising fast

Ethereum (CRYPTO: ETH) is not the largest cryptocurrency out there. That honour goes to Bitcoin (CRYPTO: BTC). But, Ethereum is the second largest in terms of market capitalisation. And if the pricing gains of the past month continue, it won’t be too long before it claims the top seat.

The price of Ethererum has skyrocketed in recent weeks. Since 6 April, the cryptocurrency is up 66.88% to US$3,443 a coin today (at the time of writing). By comparison, Bitcoin has lost 0.9% over the same period and is currently trading at US$57,000 a coin.

Over the past 12 months, Bitcoin is up 528%, while Ethereum is up 1,672%.

If you’re not too familiar with Ethereum, it is a cryptocurrency that functions a little differently from Bitcoin, even though the two coins use similar blockchain technology. Whilst Bitcoin was established with a fixed number of coins available for mining, Ethereum has no such limit. Ether tokens can also be used to create contracts between different holders. It’s that which is what has a lot of people excited about its future.

But why now? Why is Ethereum rising so rapidly?

Ethereum pips Bitcoin

Well, Simon Peters from eToro reckons Ethereum is continuing to “price its case”. He points to a recent announcement from the European Investment Bank. The Bank has recently announced the issuance of its first ‘digital’ bonds using blockchain technology. These bonds will be issued using the Ethereum network. He also notes that “the number of DApps (Decentralised Applications) continues to grow on the platform, and there is now growing demand from institutional investors for the Ethereum crypto asset itself”.

Peters also points out that S&P Dow Jones Indices has, for the first time, announced it has launched 3 new ‘crypto asset indexes’. These will track Bitcoin, Ethereum and a combination of both. If these indexes lead to a new range of exchange-traded funds (ETFs) that allow retail investors to invest in cryptocurrencies through them, we might see even more buying pressure in the assets themselves. And it’s not like there’s any shortage of that.

Aussie investors certainly can’t get enough of the crypto arena, as my Fool colleague pointed out yesterday. This sure has been an interesting space to watch, and it looks though that isn’t going to change.