Rival Ethereum Is Up 2,000 Percent Compared To Bitcoin Which Has More Than Doubled This Year

Bitcoin has been outperformed by its closest rival Ether, which is up over 2,300 percent, even though the former has more than doubled in price this year alone.

Bitcoin was trading at the day’s high of $1,003.25 on January 1. According to CoinDesk, marking a year-to-date rise of 137 percent, it broke through the $2,300 barrier for the first time to hit a fresh record high of $2,377.32, on Wednesday.

Meanwhile, the appetite for other cryptocurrencies has been stoked by the bullishness around bitcoin. And getting traction is one in particular – known as ether. According to data from Coinmarketcap.com, representing a 2,367 percent rise year-to-date, ether has risen from $8.24 on January 1, to a high of $203.30.

Ethereum is a different blockchain to the one that underpins bitcoin and ether runs on an that underlying technology.

Companies are more focused on how the Ethereum blockchain could be used in real-world applications, even while ether does have digital “coins” like bitcoin.

The so-called smart contract applications is supported by the design of ethereum. Potentially taking a lot of the human involvement out of completing a deal, a smart contract is a computer program that can automatically execute the terms of a contract when certain conditions are met.

Barclays for example, have used a form of this technology to trade derivatives.

How is it different to bitcoin?

Whereas bitcoin began in 2009, ethereum is a lot younger having only been started in 2014. According to Coinmarketcap.com, versus bitcoin’s $39.2 billion, ether’s market cap is at $18.6 billion.

While bitcoin is very much about payment technology, ethereum is also focused in smart contracts.

The Ethereum blockchain has been backed by corporates wishing to use the technology for smart contract applications, while bitcoin has been getting support from certain governments and investors.

In order to work on projects using the blockchain and to connect large companies to technology vendors, a group called the Enterprise Ethereum Alliance (EEA) was recently founded. JPMorgan, Microsoft and Intel are included in companies involved in the launch.

The growing legitimacy to the cryptocurrency was added when the EEA announced another 86 firms joined the alliance on Tuesday.

At the same time, in addition to attracting a broader investment base, the rally in bitcoin has seen investors turn to alternative digital currencies. Data from CryptoCompare shows that it was mainly crytocurrency enthusiasts interested in it as about a year ago, over 83 percent of ether buying happened with bitcoin. While fiat currencies such as the U.S. dollar and Korean won have risen sharply, bitcoin accounted for just over 32 percent of trade as of Wednesday.

“Yes the direct fiat flow options are a fleshing out of the ethereum ecosystem and show its broad appeal,” Charles Hayter, CEO of CryptoCompare, said.

The lasting effect of the ether rally is not believed to be happening for everyone in the market. Products like Ethereum could be cloned, says a worried bitcoin trader Jason Hamilton.

“People are buying a specific blockchain, but the big interests are in the technology. They’ll probably make their own clones and the ether tokens everyone is buying won’t be used for much except trading. Who knows, though,” Hamilton told a TV news channel.

“I don’t usually trade ether. I’m afraid of that bubble bursting, but it could go on bubbling up for a long time still.”

(Adapted from CNBC)

Advertisements


Categories: Economy & Finance, Geopolitics, Sustainability

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: