Ethereum, the world’s second-largest cryptocurrency, soars above $4,000 for the first time
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LONDON — Ether surged past $4,000 Monday to hit a new record high, extending a stunning rally for the world’s second-largest cryptocurrency. Ether, the digital token of the Ethereum blockchain, rose to an all-time high of $4,196.63 at 12:15 p.m. ET, according to Coin Metrics. It now has a total market value of $483.4 billion, less than half bitcoin’s $1.09 trillion. As of around 12:30 p.m. ET, ether was up 8.1% at a price of $4,187.32. Bitcoin, on the other hand, inched up 1.1% to $57,962.18. Once in bitcoin’s shadow, ether has seen parabolic gains recently as investors look to other cryptocurrencies for returns. Bitcoin fell over 2% in April, while ether rose more than 40%. The entire crypto market is currently worth around $2.5 trillion, according to CoinMarketCap, on the back of growing interest in the space.
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 globe print money to relieve coronavirus-battered economies. Major Wall Street banks like Goldman Sachs and Morgan Stanley have also sought to provide their wealthy clients with bitcoin exposure. However, some investors still aren’t buying the crypto craze. Michael Hartnett, chief investment strategist at Bank of America Securities, said bitcoin’s rally looks like the “mother of all bubbles,” while Alvine Capital’s Stephen Isaacs said there are “no fundamentals with this product, period.”
Ethereum vs. bitcoin
Founded in 2013 by Vitalik Buterin and a host of other software developers, the Ethereum network lets people build applications on top of it. Ether is the network’s native currency. Bitcoin and ether are similar in that they are both digital currencies. But they have their differences. Whereas bitcoin is viewed by its proponents as a store of value akin to gold, Ethereum aims to be the infrastructure for a kind of decentralized internet that isn’t maintained by any central authorities.
Ethereum price surges above $4,000 but overshadowed by dogecoin buzz. What is Ether?
Ether prices on the Ethereum blockchain have been steadily and quietly carving out new highs as buzz in the crypto has centered predominantly on the fervor around more speculative assets like dogecoin DOGEUSD, -20.65% in recent weeks.
However, for many blockchain enthusiasts, the rise of Ether ETHUSD, -1.31% is a significant development that is driven by the growing importance of the world’s second-largest crypto on the planet behind bitcoin BTCUSD, -5.13% .
Check out: Ether hits record high, crests $4,000 milestone
At last check, Ether was changing hands at $4,140.95 on CoinDesk, up 5.7% on Monday, with that climb bringing its year-to-date gain to nearly 460%. Ether prices traded at all-time high at $4,213.46 around Monday.
By comparison, bitcoin has was flat on the day at $57,444.65, and up more than 97% so far in 2021.
Here’s what investors need to know about the digital asset and its rise:
What is Ether?
Ether is the coin, launched in 2015 by a team including Vitarik Buterin, Charles Hoskinson, and Gavin Wood, that has come to be known for the ease by which software developers can write bespoke programs atop its network. Sometimes these applications are referred to as smart contracts.
Ether is similar to bitcoin inasmuch as it is a digital asset that is decentralized, (i.e., no one party controls it), and uses distributed-ledger technology known as blockchain that records transactions immutably. The blockchain network is supported by a digital-mining community.
Miners are the record-keepers on blockchains like bitcoin and Ether and they are rewarded with coins for their efforts.
How is Ether used?
Bitcoin’s major selling point has been its claim by enthusiasts as a store of value and as a currency to a lesser extent, but Ethereum’s network is viewed by many as a powerful, open-source, dentralized backbone off which a number of applications can be based.
Ether values have been supported partly by growing appetite for nonfungible tokens, or NFTs, and other corners of the nascent digital crypto market supported on the Ethereum blockchain.
Momentum, however, is building around so-called decentralized finance, or DeFi, projects, which are also mostly supported on the Ethereum network.
DeFi are applications and services that can facilitate borrowing, lending and trading crypto assets without an intermediary. It is seen as a possible threat to traditional financial markets, or as an application that could be more readily used to enhance buying, selling and lending on Wall Street.
A research report published on the Federal Reserve Bank of St. Louis’s website recently said that DeFi has some issues with security but if resolved could shake up the financial industry.
“However, if these issues can be solved, DeFi may lead to a paradigm shift in the financial industry and potentially contribute toward a more robust, open, and transparent financial infrastructure,” wrote Fabian Schär, a professor for distributed ledger technologies and fintech at the University of Basel and the managing director of the Center for Innovative Finance.
“It is little wonder why institutions are getting excited about the technology,” wrote Fawad Razaqzada, market analyst at ThinkMarkets in a Monday note.
“ETH uses blockchain not only for payments but also for storing computer code which can have many real-world applications,” he wrote.
Gaining Ether prominence
The European Investment Bank, a lender owned by European Union member states, issued $120 million worth of two-year bonds last week on the Ethereum network, a first for such a large-scale issuance.
What’s the outlook?
Nigel Green, chief executive and founder of deVere Group, had forecast that Ether would be at $5,000 by today. His prediction so far is a bit off the mark but he has been mostly right directionally.
It’s hard to say where Ether prices go from here but some speculate that momentum is only just beginning.
“The good thing is that it is still only a beginning for this rally as money continues to pour into Ethereum,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a daily note.
“In fact, there is strong evidence that traders and investors are actually liquidating small positions in Bitcoin and putting that money in Ethereum as they believe that this coin is still massively undervalued,” he said.
Ethers’s gains make most traditional asset returns this year look mundane. Gold futures GC00, +0.35% are down 3% year to date, while the Dow Jones Industrial Average DJIA, -0.10% and S&P 500 index SPX, -1.04% are up by at least 12% and the Nasdaq Composite Index COMP, -2.55% has gained over 5% so far in 2021.
Highly speculative dogecoin, which is up over 10,000% this year, has drawn much of the attention in the crypto world, lately. However, many investors in blockchain view Ether as a more serious digital asset with more utility than dogecoin.
Read: What the dogecoin army is saying as the cryptocurrency’s tumble triggers a bearish break in the long-term trend line
Ethereum drives through $4,000 – but can it hold ground? - CityAM
Ethereum continued its relentless upward movement by bursting through $4,000 today.
The world’s second-largest cryptocurrency moved into fresh all-time high territory with some conviction as it barely hesitated to cross the $4k line at, appropriately, 4am.
A rampant Asian market gave Ether the solid impetus it needed to stake a flag at $4,176 and claim a new peak for Vitalik Buterin’s brainchild.
Some of last week’s Champagne corks from the celebrations of punching through $3,000 have barely had chance to land, yet more look to be taking to the skies soon as ETH traders start to salivate at the prospect of reaching their most prized short-term goal… $5,000 by end of June.
Only a few short weeks ago, the idea of Ethereum getting near $4k, let alone $5k by the close of Q2 in 2021 would have drawn wry sniggers from even the most dedicated followers of fashionable Ethereum.
Indeed, as Bitcoin was bobbing merrily above $60,000 a couple of months ago, there were whispers that cracks were beginning to show in Ethereum’s usability. Project after project seemed to be bleeding out of the platform as blockchain alternatives were quick to mop up the spoils on the crypto trading floor.
Ethereum, however, clearly wasn’t prepared to stand by and watch the rivets pop from the hull as the torpedo boats circled. Instead, the decks were manned and running repairs carried out as the decentralised dreams of its founder and fans were reaffirmed, and a course was chartered to pursue the giant dreadnought Bitcoin whose smoke stacks were in danger of disappearing over a distant horizon.
The gulf between the two has long been gaping, but the signs, sentiment and momentum seem to be filling Ethereum’s billowing sails right now.
It’s worth bearing in mind that Ether – the opensource blockchain’s native token – began this year on a mere $725 with little in the way of thought or deed that might dare to offer a dream of chewing through the four-figure wire.
Yet, with Christmas songs still rattling the recovering heads of New Year merriment, ETH managed its first foray above $1,000. By mid-February it had climbed beyond the summit of $2,000 before an almighty tumble in an overheated market sent it plummeting to $1,200 as negativity in Ethereum’s often complex structure began to set in.
The gap between first and second place had never been wider. A time for deep thought and contemplation was required in order for ETH to bounce back and lift itself out of the doldrums.
And that’s just what it did.
By the end of March, Ethereum had cemented its place above $2,000, solidifying its claim one step down from Bitcoin on the crypto podium.
What happened next, though, was quite remarkable.
Bitcoin’s steamrollering of the markets, fuelled by institutional investment, came to a shuddering halt like a tank running dry on diesel.
Mid-April signalled the return to an alt market, and ahead of the pack, leading from the front, came Ethereum.
The $3,000 mark was swallowed up only a week ago, $4,000 came only a few hours ago.
It begs the question: Can it hold?
Well, a glance over the charts would seem to say ‘yes’. The trading volume is high and enthusiastic. The market volume has rocketed $476.4 billion – a significant figure that brings it closer to the half-way mark of Bitcoin’s $1.1 trillion.
Market dominance is also shifting at a pace. Today, Ethereum claimed ground above 19 per cent. Bitcoin still, of course, holds most of the share – but it’s falling. Today, the original cryptocurrency’s slice of the cake shrank to below 44 per cent.