Cryptocurrencies have become massively popular over the past couple of years. Every other day, different cryptos are in the news for record-breaking price rallies. Digital currencies have become quite popular as a new class of investments and assets, especially among the younger generation. Recently, the market witnessed a massive price surge in ethereum. This is the first time in the past couple of months that the crypto broke the US$4000 barrier. Market analysts and ether enthusiasts are optimistic that the price could rise even further.
According to coinmarketcap, currently, ethereum is valued at US$4795.02, with an increase of 1.43% in the last 24 hours. Ethereum prices have hit as high as US$4831.58 in the early hours of the market on November 9, 2021. Experts believe that there are several reasons why the price of ether is rising at such great speed. The functionality of ETH is one of the main factors that is attracting new investors.
What are the other reasons behind Ethereum’s price surge?
Ethereum is a decentralized software platform, which means that the building blocks can be used for the purpose of distributing decentralized applications and smart contracts over its blockchain network, without any third-party control and in a secure, seamless manner. With its increased application, there has been an increased number of developers for ether. Its network acts as an incentive for developers looking to develop and run applications on its web. This makes it appealing for several developers looking forward to investing in ether’s growth and boosting its market value.
Besides this, NFTs are currently flourishing. NFTs can act as sports trading cards or contain video clips of historic sporting moments. Either way, they contain the ownership, copyright, and authorization information coded into the token and stored in the blockchain network. Hence, several crypto enthusiasts are using and investing in NFTs, which might be impacting ether’s value because a sizable portion of the NFT market is hosted on the ethereum network. Whenever investor buys or sells NFTs, they have to use the ETH network.
A group of experts believes that ethereum and most major cryptocurrencies in the market follow the price of bitcoin as it moves up or down. But over the past year, bitcoin has witnessed significant gains, while ethereum just lagged. Another group of experts and market analysts believe that ETH is just catching up with the gains of bitcoin.
One of the other factors of the price surge is the launch of ethereum 2.0. This upgrade addresses major concerns impacting the traditional version of the crypto. This version will reduce the transaction fees, which is especially useful in Defi trading, where each transaction can end up costing thousands of US dollars. Apart from this, there are talks about a probably ethereum futures trading, commencing from February 2022. This will allow the traders to speculate on the future worth of the crypto and invest accordingly.
Why is the Ethereum price surge significant for the crypto market?
Currently, ethereum is used by tech giants and corporations to develop customized blockchain models. In the coming years, the increased use of ethereum will lead the creators to switch from the proof-of-work to a new consensus algorithm. The next version will absolve these shortcomings. But the question is, what will it mean for its biggest rival bitcoin?
Bitcoin supporters continue to agree that the protocol is more decentralized than the proof-of-stake algorithm, which makes it the crypto brand that investors are more comfortable handling. The recent surge in BTC has helped lift the entire crypto market. But some of the price movements in ETH show the investors are betting that the upgrade might take over BTC in the coming years, resulting in a massive change in the global crypto market.
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