Ethereum – the world’s second-largest cryptocurrency by market cap and the number one competitor to bitcoin – has shot up like no other currency this week. The asset has lost much of the attention thanks to bitcoin once again rising beyond the $37,000 mark in the past few days, but it has still set a new precedent and has traders talking about what’s to become of the world’s primary altcoin.
Ethereum Is Growing Like No Other Coin
Ethereum initially began in 2015, which makes it considerably younger when compared with assets like bitcoin and even Litecoin, which emerged through a hard fork of BTC. At only six years old, it is one of the newest coins the crypto space has come to experience, but that doesn’t make it any less powerful. In fact, the asset’s blockchain is now viewed as the most popular and powerful when it comes to creating additional currencies and decentralized applications (dapps).
However, the technology has run into a few ups and downs over the years, primarily because it is so popular. You have so many developers looking to Ethereum to establish their products that its blockchain has become seriously bogged down with excessive traffic. This has resulted in slow speeds and high gas prices.
All that could potentially change now that Ethereum 2.0 is on the verge of becoming mainstream. Co-creator Vitalik Buterin has been touting 2.0 for some time considering that in his eyes, Ethereum has not been scalable for a while.
Bitcoin has been rallying heavily as of late, which has seemingly opened the door for Ethereum to join the ranks. Since the beginning of the year, bitcoin is only up by about 29 percent. Ethereum, by comparison, has surged about 120 percent, meaning it’s putting bitcoin’s latest jumps to shame.
No doubt this likely has to do with the fact that ether-based futures contracts are set to be released to traders beginning next week through the Chicago Mercantile Exchange (CME). The currency is now trading for well over $1,700, the highest it’s ever been.
Sachin Patodia – a partner at Avon Ventures – commented in a recent interview:
Bringing more financial instruments will bring more participants into the market. That probably is positive for the ether price… We’ve seen this pattern over many crypto cycles that we’ve gone through, where bitcoin leads the way in price movement and then you see what we call the altcoins get carried along.
This Will Pump Things Up More
Simon Peters – an analyst with brokerage firm e-Toro – also believes that the introduction of ETH contracts will help the asset reach new peaks. He states:
This move by the CME may spark further buying of ether by new entrants to the market because it provides a way for sophisticated investors to hedge their risk against positions that they may be holding on the underlying asset.