Ethereum's Surge: A Challenge to Bitcoin's Dominance?

Ether price rise can be a threat to Bitcoin

Cryptocurrency Ether price went beyond $4,000 on 10th May, Monday, hitting an all-new record high. Though it is the second-largest cryptocurrency, this new record seems to try to outbeat Bitcoin for the world’s largest cryptocurrency.

According to Coin Metrics, the Ether price today went upto $4,196.63 at 12:15 p.m. ET. Today, the market valuation of Ether is $483.4 billion, which is less than half bitcoin’s $1.09 trillion.

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Ether runs on the ethereum blockchain and has acquired parabolic gains recently as more and more investors are looking forward to investing in cryptocurrencies. However, Ether isn’t the only cryptocurrency that has witnessed a surge in prices. Other cryptocurrencies like Dogecoin are in the race of price surge.

If we look back a year, the price of Ether went down due to the Covid-19 pandemic outbreak. In one year, the price of Ether has grown ten times. Isn’t that phenomenal? One of the reasons we can credit for such a huge price surge is due to new features and numerous developments in recent times.

Ethereum is a decentralized software platform that is used primarily for DApps (Distributed Applications) and smart contracts that function in a secure manner without any third-party intervention.

With the world shifting to the digital mode, developers are embracing the Ethereum network due to its increased applications. Business and banks are also turning their heads to the decentralized ledger technology.

If we compare Ether and Bitcoin, the latter took a dip of over 2% in April, whereas the former grew more than 40%. One key differentiation between Ether and Bitcoin is that Bitcoin is limited to empowering digital, decentralised money.

This means that there is no central institution involved to issue money. However, Ethereum, on the other hand, can host both decentralised applications as well as digital coins.

Leading investors and some corporate purchasers like Tesla ran to bitcoin recently, seeing the digital coin as a potential inflation support as national banks throughout the planet print cash to assuage Covid-battered economies. Significant Wall Street banks like Goldman Sachs and Morgan Stanley have additionally looked to furnish their well-off customers with bitcoin exposure.

Further, Ethereum is getting popular due to the rise of NFTs, which resemble digital assets created to have the possession of unique virtual items like art and sports memorabilia. CryptoKitties and CryptoPunks are widely popular NFTs that run on Ethereum.

The launch of Ethereum 2.0 is also one of the reasons to boost the price of Ether. This version aims to solve major concerns and bring a variety of changes to the current version of Ether. Particularly, it aims at reducing transaction fees, which is quite beneficial in DeFi trading, where every transaction can wind up costing what could be compared to several US dollars.

Ethereum is also trying to reduce the amount of power needed to process transactions and mining. At the end of this year, we can see a reduction in industrial mining warehouses.