Ethereum price hits new all-time high, but record high fees threaten its success
The past month has seen ETH record profits in excess of 33%.
- The cost of executing a smart contract on the ETH network recently rose as high as US$135 (AUD$182).
- Solana is now the fourth-largest cryptocurrency by total market capitalisation, recently overtaking Tether and Cardano.
- Ethereum's scalability woes have caused users to migrate to other altcoin blockchains such as Polkadot and Avalanche.
Earlier today, Ethereum, the world's second-largest cryptocurrency by total market capitalisation, scaled up to a fresh all-time high of US$4,738 (AUD$6,400) after having remained between AUD$5,650 and $6,200 over the past week.
This latest surge comes despite the Ethereum network continuing to be faced with high transaction fees. In fact, just recently, Malaysian commodities trading firm Enegra Group – boasting a net value of AUD$38 billion approximately – announced that it had moved its equity-tied EGX security tokens from the Ethereum ecosystem to Polygon so as to minimise its high transaction charges.
Rising gas costs have plagued the ETH network of late, with it costing AUD$182 to execute a single smart contract. As a result, more and more users have migrated to alternative blockchains such as Polygon, Binance Smart Chain (BSC), Avalanche, etc. In fact, over the last few months, Polygon has been able to process 3+ million transactions per day as well as accrue a total of 105 million unique wallet addresses.
Solana surpasses Cardano and Tether in terms of total market cap
Thanks to yesterday's market surge, Solana, a decentralised computing network focused on scalability, has been able to surpass Cardano and Tether to take the fourth spot on the list of cryptos by total market capitalisation. The total value of SOL tokens available in the market currently amounts to US$74.7 billion, trailing only Binance Coin (US$109 billion), Ethereum (US$540 billion) and Bitcoin (US$1.17 trillion).
Pricewise Solana has been on a tear all through 2021, with its associated crypto SOL scaling up to a new all-time high value of US$260 (AUD$350) just a day ago. On the heels of this momentum, the firm's venture capital arm – called Solana Ventures – announced that it was all set to invest US$100 (AUD$135) million into the blockchain gaming sector. The deal will be facilitated in conjunction with prominent crypto entities including FTX and Lightspeed Venture Partners.
Crypto tax laws passed by US senate
Last week, the US House of Representatives announced the passing of a US$1.2 trillion bipartisan infrastructure law that was introduced by the Biden administration earlier this year. As part of the legislation, citizens are now required to follow a comprehensive set of new guidelines when it comes to reporting their crypto taxes.
That said, a lot of analysts and pundits have claimed that the bill is not only unconstitutional but also features language that is extremely unclear, citing parts where it treats crypto software developers, transaction validators and node operators akin to brokers working for various traditional financial institutions.
Disclosure: The author owns a range of cryptocurrencies at the time of writing