Ethereum has busted past US$1,000 going up to US$1,250, will it ever stop?

Rhys Muter 8 January 2018 NEWS

Ethereum $1,000 - In text image1

Since cracking the US$1,000 mark, confidence in ETH has continued to appreciate – and so has its price.

Cryptocurrency whiz-kid Vitalik Buterin will enjoy comfortable circumstances for a long time to come now that the Ether tokens (ETH) native to his Ethereum blockchain have soared past US$1,000. The ETH price has gone ballistic having reached over US$1,250, and there seems to be no sign of the price rise reversing its gains immediately.

ETH has been a consistently strong performer price wise. In the period from Jan 2016 up to about April 2017, the price of ETH remained quite stable hovering around US$8 to US$12 per unit of ETH. That relative price stability was short lived as greater liquidity entered the market in the latter stages of 2017. The price initially shot up to US$391 at 13 June 2017, receded to a low of US$148 on 16 July and then recovered to around US$385 on 1 September.

Since that period, the price of ETH has gone below the US$300 line only briefly. ETH underwent a huge rally in mid-November 2017 resulting in the price of ETH quadrupling from US$300 to sit at US$1,224 at the time of writing on 8 January 2018.

Investor confidence in Ethereum

Many investors have placed a high amount of confidence in the Ethereum blockchain, and if the ETH price is anything to go by, that confidence does not seem to be disappearing any time soon. The Ethereum blockchain has a number of characteristics that have created such significant investor confidence.

One is that the tokens used on the Ethereum blockchain, the ERC20 compliant tokens, have a higher degree of utility when compared to bitcoin. The specialisations that ERC20 tokens on the Ethereum blockchain can produce lead to a wider set of tokens that have a wider set of applications. For example, two of the most influential cryptocurrencies, XRP of Ripple technologies and ITC of IoT Chain, are both ERC20 compliant tokens.

Another important characteristic of the Ethereum blockchain is the ability to use smart contracts. Smart contracts are an ingenious development of the blockchain that will introduce a level of automation to financial transactions. The Ethereum blockchain will facilitate autonomous computers being able to communicate with one another.

This would be something like an autonomous car getting gas at an autonomous gas station. Smart contracts allow two computers to communicate and transfer funds. The efficiency gains of these developments are inspiring businesses to create new opportunities. With these brief details in mind, it is understandable that the price of ETH has been a consistent achiever since it began trading.

The incredible price gains that ETH has shown since September 2017 should be viewed against the broader cryptocurrency market trends of 2017. The total cryptocurrency market capitalisation increased from US$18 billion to over US$650 billion in 2017. More increases are expected in 2018, especially considering that market capitalisation has already reached over US$800 billion. With that in mind and considering the sound technicals that back ETH, it is safe to say that 2018 could be another good year for the price of ETH.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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