In the early hours of May 4, the second-largest crypto on the market, ether (ETH), reached an all-time high. The price of the digital currency has managed to surpass $4,000. In doing so, it has effectively pushed the crypto’s co-founder, Vitalik Buterin, to “billionaire” status. Thanks to this boost, one of his digital wallets now holds over $1 billion worth of ETH.
Ether rises, Bitcoin drops
Since its launch in 2015, Ethereum would go on to be a big name in the crypto space alongside Bitcoin. Though frequently playing second fiddle to this topliner, it has a large following of its own. It is an open-source, blockchain-based, decentralized software platform whose common usage is for its native token, ether. It permits the construction and operation of smart contracts and distributed applications (DApps). All without any interference from a third party.
Often stuck in Bitcoin’s shadow, ether recently saw parabolic gains as investors seek out other cryptocurrencies for returns. The cryptocurrency would rise over 40% in April, while Bitcoin would drop a little over 2%. According to CoinMarketCap, the crypto market is currently worth over $2 trillion thanks to growing interest in digital currencies.
Since earlier this year, mainstream investors and corporate buyers have flocked to Bitcoin in droves. They see the digital coin as being a potential inflation hedge as central banks worldwide are printing money to relieve the pandemic’s economical damages.
Changes and upgrades
There is something quite interesting about this achievement. Over the last few months, ether would start to move independently of its longtime rival. Ether and Bitcoin were once seemingly connected as a sell-off. This is because Bitcoin would typically conjure up an inevitable knock on the other cryptocurrencies’ prices.
This decoupling has been in construction for some time now. This is due to the Ethereum network currently undergoing a major overhaul. Developers state that Eth2 will transform Ethereum into something that is much more secure, scalable and sustainable. Upgrades to make the mining process proof-of-stake instead of proof-of-work will make ether token minting less energy-intensive.
Bitcoin’s decline to the $50,000 mark would cause crypto-savvy individuals to re-examine their portfolios. In comparison, ether proves to be a lot less volatile. Any issues present in Bitcoin’s network – which caused a transaction blockage earlier this month – only increase ether’s popularity even further.
Because of Ethereum’s reputation for applying ease to smart contracts, ether has become a popular exchange medium for non-fungible tokens (NFTs). This year has proven to be lucrative for the cryptocurrency. It continues to see millions of dollars in NFT purchases as the months go by. Transactions by traditional venues like auction company, Christie’s, are helping to push it into the mainstream.