- Ether has witnessed a strong rally this year, with its value jumping by 450% so far in 2021.
- The price of Ether crossed US$4,000-mark for the first time on May 9.
- The rise of Ethereum and other digital coins has weakened Bitcoin’s market dominance.
The cryptocurrency market is on a roll, thanks to strong buying by retail and institutional investors, who are betting high on digital currencies to make money in uncertain market situation induced by COVID-19. However, it is interesting to note that the current leg of the rally is not led by Bitcoin, which has been the flagbearer of the cryptocurrency market for many years. The focus has shifted from Bitcoin (BTC) to other digital assets such as Ether (ETH) and Dogecoin (DOGE).
Outpacing Bitcoin, Ether’s value grows over 450% in 2021
@Kalkine Image 2021
Ethereum (or simply Ether), traded using the ethereum blockchain, has seen an unprecedented rise this year, with its value jumping by nearly 450% so far in 2021, giving investors better returns than Bitcoin and other traditional mainstream investment platforms. On the other hand, Bitcoin has delivered a return of just 100% in the last four months, which indicates that momentum has shifted towards the ethereum blockchain.
Apart from record high prices, Ether’s market capitalisation has also hit record high in recent past. With market value of US$477 billion, it has captured around 20% of the total market capitalisation of the cryptocurrency market, its highest level since 2018.
Meanwhile, Bitcoin, which has primarily dominated the crypto market with more than US$1.1 trillion in market capitalisation, saw its market share shrinking below 50% for the first time since 2018, according to CoinMarketCap. It reflects that investors are beginning to take more opportunistic positions as the rally in Bitcoin has matured over the last few months.
What fuelled Ether’s rally
Image source: r.classen, Shutterstock
Ether, the world’s second-biggest cryptocurrency, crossed US$3,000-mark for the first time on May 3 after European Investment Bank (EIB) proposed to launch digital bond sale on the ethereum blockchain network. Continuing to gain momentum, the price of Ether breached US$4,000-mark on May 9, with its value surging over US$1,000 in just six days.
The price of Ether rose from around US$1,400 during the 2017 crypto boom to the all-time high of US$4,143 at the end of 2017, before falling to around US$107 in March 2018.
The reason behind the recent rise of Ether may be the launch of ether exchange-traded funds in Canada and rising demand for ether wallets to transact Non-Fungible Tokens (NFTs). An NFT is a digital asset that holds a real-world object, particularly art and music. They are generally either one of a kind or at the very least, an extremely limited edition of the piece of art or music.
Having hit a new record high, Ether was trading 5% higher at US$4,121, while Bitcoin was quoting at around US$59,136, down 0.72% in the last 24 hours.
Meanwhile, Dogecoin, launched as a meme cryptocurrency, was trading 3.5% lower at US$0.54 after Tesla CEO and crypto enthusiast Elon Musk described it as a "hustle" during a television interview.