In 2021, Bitcoin and Ethereum have seen a huge rebound. In April 2021, the value of the cryptocurrency market exceeded US$2 trillion for the first time.
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LONDON-On Monday, Ether surged above US$4,000, setting a record high and continuing the astonishing gains of the world̵
According to data from Coin Metrics, the digital token Ether of the Ethereum blockchain has risen nearly 7% in the past 24 hours, reaching $4,141.99 at 3:40 am Eastern Time. Now, its total market capitalization is 476.3 billion USD, less than half of Bitcoin’s 1.1 trillion USD.
Once caught in the shadow of Bitcoin, Ethereum has recently seen parabolic gains as investors seek returns from other cryptocurrencies. Bitcoin fell by more than 2% in April, while Ethereum rose by more than 40%. According to CoinMarketCap, due to growing interest in the field, the entire crypto market is currently worth more than $2.5 billion.
Earlier this year, mainstream investors and corporate buyers such as Tesla flocked to Bitcoin as a potential inflation hedging tool, as central banks around the world are printing banknotes to ease the economies hit by the coronavirus . Major Wall Street banks such as Goldman Sachs and Morgan Stanley are also trying to provide Bitcoin exposure to their wealthy customers.
However, some investors still do not have the enthusiasm for buying cryptocurrencies. Michael Hartnett, chief investment strategist at Bank of America Securities, said that Bitcoin’s rebound looks like the “mother of all bubbles,” while Stephen Isaacs of Alvine Capital Isaacs) said, “The product has no fundamentals during this period.”
Ethereum and Bitcoin
The Ethereum network was founded in 2013 by Vitalik Buterin and many other software developers, and people can build applications on it. Ether is the national currency of the network.
Bitcoin and Ethereum are similar because they are both digital currencies. But they are different.
Proponents regard Bitcoin as a store of value similar to gold, while Ethereum is committed to creating a decentralized Internet that cannot be maintained by any central government.
It forms the basis of the increasingly popular trend of cryptocurrencies known as “decentralized finance”, which aims to recreate traditional financial products using blockchain technology (a distributed computer system that supports many cryptocurrencies).
Ethereum also benefits from the rise of NFTs or non-fungible tokens, digital assets designed to represent the ownership of unique virtual items such as artworks and sports memorabilia. Many NFTs, such as CryptoKitties and CryptoPunks, run on Ethereum.
However, the prosperity of this activity has caused congestion on the Ethereum network. Ethereum is currently undergoing an ambitious upgrade that, in theory, will shorten transaction time and reduce the amount of electricity required to process transactions. Both Bitcoin and Ethereum have caused environmentalists to criticize the impact of cryptocurrency mining on the climate.