The cryptocurrency hit a new all-time high on Tuesday of $3,523.59, according to CoinMarketCap’s price index, pushing its overall market cap above $400 billion for the first time in its history.
This is more than a third of bitcoin’s market cap, having been worth less than a sixth of its more famous rival at the start of 2021.
Such comparative growth was made possible by an astonishing price rally that has seen ethereum rise from below $150 to its current price in less than a year, with the last week alone seeing new all-time high records broken on a daily basis.
“Ethereum has been able to maintain its positive momentum with a crushing series of all-time highs in the past week,” Konstantin Anissimov, executive director of cryptocurrency exchange CEX.IO, told The Independent.
“The current all-time high has reignited the ambitious sentiment that ethereum may eventually flip bitcoin by market capitalisation in the near future. In the past week, ethereum has surged by 35 per cent against the 1.5 per cent growth for bitcoin. While a retracement is in the works, the positive growth rate has been steady enough to warrant any sharp drop.”
It is not the first time an ethereum price rally has led to such conjecture.
In 2018, shortly after the cryptocurrency hit a new record high above $1,400, one expert told The Independent that it was maybe only a matter of time before ethereum overtook bitcoin.
Hubert Olszewski, director of business development at Blockchain Board of Derivatives claimed that ethereum would eventually surpass bitcoin because “from the get-go it was a more versatile tool”.
While bitcoin functions as a payment system and a store of value – its finite supply has led to some labelling it ‘digital gold’ – ethereum was designed to be an entire software platform capable of enabling applications like smart contracts.
Ethereum’s versatility has earned it the nickname ‘world computer’, as it holds the potential to decentralise the entire internet and transform the way we transfer everything, from online data to the property deeds of a house.
One example of this has been the recent trend of non-fungible tokens (NFTs) – whereby digital artwork is sold, transferred and stored on the blockchain – which has largely been powered by ethereum.
It is this functionality that has helped ethereum buck market trends by outpacing even bitcoin’s considerable price gains in recent months, with some market analysts believing that it is only a matter of time before it hits $7,000.
“I believe the surge in prices is more of a trend towards the asset and seeing its utility grow,” said Philippe Bekhazi, CEO of digital currency clearinghouse Stablehouse.
“The adoption of blockchain continues on a straight exponential path, something we have been anticipating for years. We are no advisors, but I would not be surprised if ethereum doubles this year.”