The world’s second-largest cryptocurrency ether (the ticket that powers the Ethereum network) has nearly doubled its price since early this year from around $ 750 to break above the $ 1,400 mark on Tuesday. This has significantly outpaced the market leader’s bitcoin rise from around $ 29,000 to $ 35,000, a 20% jump. Mint He spoke to cryptocurrency industry professionals to understand what is driving the interest in Ethereum’s cryptocurrency ether (ETH).
“Normally, when the bitcoin rally matures, altcoins like ether catch up. This is because bitcoin investors start diversifying their holdings into other cryptocurrencies,” said Nischal Shetty, CEO, WazirX, an exchange India’s largest cryptocurrency. “Ripple – the third largest cryptocurrency – has seen a collapse because of the US SEC lawsuit, and so hedge investors are moving to Ethereum. Also, over the past year the growth of decentralized exchanges and investors are negotiating through these exchanges will pay ether transaction fees, ”he added.
Also Read | Why server piles are the new play realty
Rahul Pagidipati, CEO, ZebPay, a cryptocurrency exchange, highlighted a structural shift in Ethereum towards the 2.0 protocol that allows investors in ether to earn interest. The new protocol is built around the principle of “proof of stake” rather than “proof of work” which can reduce transaction costs and electricity consumption. “Nearly 3 million ETH ($ 3.8 billion) have been locked up for long-term preservation, removing them from the supply that can be bought. With lower supply comes higher prices, “he added. The cryptocurrency has a market cap of about $ 150 billion.
Ether is also relatively cheaper than bitcoin in terms of each unit, which creates a psychological pull factor among investors. “Owning one full bitcoin is probably a dream now for most people. But you can still buy full ether for ₹1 lakh, still reaching a lot. Those who remember ₹Maybe 1 lakh bitcoin thinks this opportunity won’t last much longer, “Pagidipati said.” There is a theory that the price of ETH will double when it breaks its all-time high as it did yesterday, parallel to what happened in the bitcoin case. However, at the moment, I am wary of moving prices in the future, ”added Shetty.