While the meteoric rise in the price of Bitcoin has grabbed headlines in recent weeks, the world's second-largest cryptocurrency is also experiencing a period of significant growth. Overnight, the Ethereum network cryptocurrency (Ether/ETH) crossed the symbolic threshold of €1,000 for the first time since 2018, rising more than 20% in 24 hours. The coin was trading at a high of €1.142, just below its all-time high (€1.448) three years ago. In the last twelve months, the popular altcoin has seen an even higher percentage increase than Bitcoin, registering a price increase of close to 800%, compared to the gain of around 300% achieved by its more well-known rival.
Ethereum Price
For the uninitiated, Ethereum is a public blockchain network similar to the one behind Bitcoin, but with added functionality that allows for the execution of agreements called smart contracts and the creation of decentralized applications. The network recently began the transition to its second generation, dubbed Ethereum 2.0, which will pave the way for more efficient network maintenance and a dramatic increase in transactions per second. The cryptocurrency that powers the Ethereum network, ETH, has never reached the heights of Bitcoin. However, ETH's performance tends to map Bitcoin's price movements relatively accurately, and investors are worried about missing out on the search for a cheaper entry into the cryptocurrency market. According to CryptoCompare, major exchanges recorded an ETH trading volume of €19 billion in the last 24 hours, compared to €16 billion for Bitcoin. Cryptocurrency reserves held by exchanges are also down 20% since May 2020, creating something of a supply shortage. Institutional investors are also expected to flock to Ethereum soon, as has been the case with Bitcoin in recent months. If that were to happen, adding further legitimacy to an already bullish sentiment, Ethereum could surpass its 2018 high. However, as always, caution should be exercised when considering an investment in cryptocurrencies such as Bitcoin or Ether. As investors found out the hard way in 2018, this latest rise in value is likely to be followed by a sharp drop, wiping out billions of dollars in value. Via CoinDesk