Ethereum’s price breaks the US$4,000 mark
After falling to a relative low of AUD$4,790, ETH is now trading comfortably above AUD$5,100
- Ether is currently showcasing daily gains of 4+%
- Ethereum's market dominance is currently at a 2-year high of 18.4%
- The currency's total market capitalisation is currently hovering around the AUD$600 million mark.
It's no secret that Ether has been on a tear over the last couple of weeks, with the second-largest cryptocurrency by total market capitalisation scaling up to new all-time highs seemingly every other day. At press time, the premier altcoin is trading at AUD$5,200, showcasing weekly gains of just under 40%.
Thanks to its ongoing price action, ETH's market dominance index has continued to grow. As can be seen from the chart below, Ether's dominance ratio is currently at its highest levels – i.e. 18.5% – since February 2018, a time when the crypto sector as a whole was still riding high thanks to the then ongoing ICO frenzy that saw the value of many tokens rise to unrealistic levels within extremely short periods of time.
To get a better idea of what's causing Ether to explode and where the currency might be headed in the near-to-mid term, Finder spoke with Sidharth Sogani, CEO and founder of crypto and blockchain data provider CREBACO Inc. In his view, the reasons for ETH soaring are manifold:
"Ethereum has just undergone the Berlin hardfork and continues to witness an increasing amount of DeFi-oriented activity across its ecosystem. Not only that, another reason why ETH is soaring is that people are beginning to see the currency's market share growth in comparison to BTC."
That said, it needs to be mentioned that while average transaction costs on the Ether network had reduced to around the AUD$6-$10 mark following the Berlin upgrade, fee rates have once again risen quite substantially, with the figure currently laying north of the AUD$34 mark.
Lastly, some of the other aspects that Sogani believes may be helping Ether grow, include the currency's ever reducing supply thanks to staking as well as the fact that more and more people are beginning to move their digital assets to hardware wallets. "If you notice the market share of BTC and ETH in 2018 and now, you'll notice that ETH has underperformed. If BTC has targets of AUD$95k to AUD$130k for 2021, ETH will rise proportionally to around AUD$15,500 in my opinion," he added.
What lies ahead?
Ethereum's market cap has been growing at a staggering rate, with the figure currently lying at $598 million. As a result, the currency's year-to-date gains stand at 550+%, a number that is considerably higher than Bitcoin's profit ratio, which currently lies around the 100% mark.
Lastly, as pointed out by Finder earlier, ETH has been on the receiving end of a lot of institutional interest recently. In this regard, it is estimated that major players have already acquired around $40 billion worth of the digital currency over the last couple of weeks.
Disclosure: The author owns a range of cryptocurrencies at the time of writing