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On Monday, Ethereum reached a new all-time high of over $4,000 for one ETC ($4,196.63 at 12:15 p.m. ET to be precise). The new high stunned the cryptocurrency world and brought the cryptocurrency’s market value up to $483.4 billion.
Despite Ether always being in Bitcoin’s shadow, its colossal gains have given the cryptocurrency an overall growth of over 40%.
What is Ether?
Ether is a decentralized cryptocurrency that stores transactional data on a blockchain and is generated by the Ethereum protocol. The cryptocurrency’s main aim is to be used as a method of payment for transactions on the Ethereum platform.
The Ethereum platform was invented by programmer Vitalik Buterin; Vitalik proceeded to have his idea crowdfunded, and eventually, the platform went live on 30th July 2014. The platform allows developers to create and operate decentralized applications – this means creators can publish and use these applications without the intervention of any central authority.
Similar to Bitcoin, Ether is built on blockchain technology. According to Buterin, Ethereum is “a blockchain with a built-in programming language” and the “most logical way to actually build a platform that can be used for many more kinds of applications.”
Is Ether overvalued?
Some analysts think that Ether’s growth is fueled by an increased interest in DeFi finances from the public. They also believe it is overvalued at its current levels.
“The myriad possibilities of decentralized ledger technologies should be likened to a technological force of nature that will continue to disrupt finance and other businesses,” said chief technology officer at Bitfinex, Paolo Ardoino.
Ether’s price is driven by many factors, one of it being the fact that institutional investors have shown some unprecedented interest in it. “(Crypto has) got a lot more institutional involvement than people who haven’t followed the market believe,” said Pepperstone’s head of research, Chris Weston.
For example, a recent report from the European Investment Bank (EIB) mentioning that the bank plans to launch a digital bold sale on Ethereum’s blockchain, caused the cryptocurrency to surge last week.
Another reason for its growth could be correction. According to Nigel Green, founder of the deVere Group, the cryptocurrency’s value is increasing because it’s playing “catch-up with the wider markets.”
“The recent price hikes rise are a ‘correction’ as ETC hadn’t experienced the pull of bull market – until now,” he added.
Bitcoin started the week well, with its price sitting at $59,600 on Monday. Unfortunately, it continued to decline to under $56,000. Some crypto enthusiasts believe that Bitcoin’s decline is attributed to the fact that a portion of its capital is now being pumped in Ethereum and Dogecoin.
The meme cryptocurrency, Dogecoin, saw tremendous growth last week, but its bubble was burst when Elon Musk called it a ‘hustle’ during an episode of Saturday Night Live. Investors are fishing for other investment opportunities in altcoins; demand for crypto has risen highly over the last weeks as people turn to alternative investment opportunities.
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