Ether has been soaring, eclipsing $3,000 for the first time in a shift that is stealing some of Bitcoin’s thunder, but is also a positive sign for cryptocurrencies in general.
Ether, the cryptocurrency associated with the Ethereum blockchain, rose 13% on Monday afternoon to $3,300, a new high. Bitcoin, which was up 2%, has been trailing Ethereum on a relative basis, and now makes up less than half of the value of all cryptocurrencies. Ether has tended to rise during periods of innovation in crypto, as people test out new ways in which the technology might be used.
Unlike Bitcoin, the total number of Ether isn’t capped, so it isn’t really an inflation hedge. Instead, the Ethereum blockchain has been a key building block for some of the most promising—and sometimes controversial—projects in the industry. The Ethereum blockchain is considered more useful than Bitcoin for more complicated programming. It is also undergoing an upgrade that could make it less energy-intensive, possibly bypassing a key criticism of Bitcoin.
In 2017, Ether soared in part because Ethereum was the platform for many independent coin offerings, or ICOs, which at the time were equivalent to initial public offerings in the stock market. Many of those ICOs were eventually shut down by regulators, who considered them unlicensed securities offerings.
Now, Ethereum has become a key on-ramp for two of the fastest-growing industries within cryptocurrencies. One is decentralized finance, known as Defi, which is designed to replace banks and intermediaries as places to borrow and lend money. The other is non-fungible tokens, which are pieces of software designed to make it easier to authenticate and transfer online collectibles. Both industries are built largely on the Ethereum blockchain and are worth billions of dollars.
“The use case argument justifies the appeal for Ethereum and the current social media buzz has many traders eyeing a run towards $10,000 before the end of the year,” wrote OANDA analyst Edward Moya.
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