Ethereum Spikes After New Upgrade As Its Crypto Market Dominance Gains An Edge On Bitcoin

Forbes

Topline

Ether surged Thursday after the long-awaited launch of a software upgrade meant to help the cryptocurrency transition to a more environmentally friendly blockchain network—a development that alongside surging mainstream adoptions has helped the world’s second-largest cryptocurrency far outperform larger rival Bitcoin.

After surging to a two-month high, ether prices are up 280% this year—trouncing bitcoin’s 32% gain.

SOPA Images/LightRocket via Getty Images

Key Facts

In less than two hours Thursday morning, ether prices spiked 6% to a nearly three-month high above $2,800 after the London upgrade, which overhaul’s ethereum’s fee structure to make transaction costs easier to predict and less expensive, went live shortly after 8:30 a.m. EDT.

How To Get Free Crypto  

Though miners, who run power-intensive algorithms to verify cryptocurrency transactions on behalf of users, should expect revenue to drop as much as 50%, the new upgrade marks a major step in ether’s push to become more environmentally friendly by requiring less work from miners.

The surge boosted ether’s market capitalization above $325 billion and lifted year-to-date gains to more than 280%—far higher than market-leader bitcoin’s 33% increase.”​

​Ethereum has been outperforming Bitcoin for about two years, and we expect more of the same,” Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, wrote in a Wednesday note, citing the upgrade and the cryptocurrency’s booming adoption as catalysts for continued growth. 

Increasingly during the crypto market’s latest downturn, institutional investors have been cashing out of bitcoin and into other cryptocurrencies, investment research firm CoinShares noted in a Monday report, revealing that investors have decreased their bitcoin holdings for 10 of the last 12 weeks, compared to just six for ether.

Coinbase Banner  

Meanwhile, trading volume of NFTs, the buzzy digital collectibles that run mostly on Ethereum, reached a record-breaking $171 million last month, up 338% from the equivalent week in the previous month, according to blockchain company OKLink.

Key Background

Though bitcoin has led the nascent cryptocurrency market since it was created nearly 14 years ago, the world’s largest digital asset has fallen hard since April amid increased scrutiny over its environmental toll. Several provinces in China have banned mining as officials in Beijing crack down on environmental regulations, and the nation’s share of mining has plummeted from more than 80% to 45% last month. Tesla CEO Elon Musk also fueled the massive selloff in May, saying the electric-carmaker would halt vehicle purchases in bitcoin and stop investing in the cryptocurrency until a majority of mining occurs using renewable energy. Bitcoin prices have struggled to recover ever since and are still down nearly 40% from their high this year. Ether, on the other hand, is just about 30% off its latest high in May.

Surprising Fact

Bitcoin’s market dominance has fallen this year from nearly 70% to about 40%. Meanwhile, ether’s market share has swelled from 10% to 20%, with the world’s second-largest cryptocurrency now commanding a market capitalization of about $330 billion.

Tangent

In another sign of growing ethereum adoption, Goldman Sachs last week filed to create its own exchange-traded fund investing in decentralized finance, which refers to financial applications reliant on blockchains as opposed to intermediaries like exchanges and central banks. Thus far, a vast majority of decentralized finance, which this year grew to be a $100 billion market, occurs on Ethereum.

FreeBitcoin Banner  

What To Watch For

Despite the Thursday upgrade, Ethereum continues to verify transactions using the same consensus mechanism as bitcoin, known as proof-of-work, which requires miners to run energy-intensive algorithms to secure networks. As soon as next year, Ethereum plans to complete its transition to proof-of-stake, which eschews much of the power-hungry computing by making transaction validators instead dedicate a portion of their own cryptocurrency while verifying transactions.

Further Reading

Ethereum’s Major Upgrade Today Will Be A Blow To Miners, Potential Boon To Investors And Users (Forbes)

Ethereum Soars Ahead Of Major Upgrade, Boosting Bitcoin And The Price Of BNB, Cardano, Polkadot And Solana (Forbes)

NFT Markets Post Record-Breaking Week (CoinDesk)

Go to Source
Author: Jonathan Ponciano, Forbes Staff


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.