Why the Price of Ethereum has Risen Over 5,000 percent During 2017
What’s common between Golem, EOS, Qtum, OmniseGo, Augur, BAT, Iconomi and Gnosis? That they are all cryptocurrencies with market cap of at least $100 million while first three of the list have crossed the $1 billion threshold. That can be said for plenty of other coins, so what makes them different? They are all ERC20 tokens, built on the Ethereum blockchain.
Bitcoin has risen over 1333 percent in 2017, with each month breaking numerous new records. Bitcoin isn’t the best-performing cryptocurrency of 2017 – Ethereum has it outdone.
The price of one Ethereum token, ether, has risen by over 6000 percent since January 2017. Ethereum’s total market value has flown from $700 million to $46.4 billion, which has made it by far, one of the most successful cryptocurrencies of 2017.
Mike Novogratz believes that ether is in a prime position for exponential growth going forwards. The billionaire venture capitalist is optimistic about the recent price trend of the cryptocurrency. Novogratz predicted a year-end finish of close to $500 in a recent statement that he made.
It has been predicted by several analysts that a key reason for the rise in market cap has been the substantial growth of the ICO market. In January through November, $2.8 billion was secured through ICO projects. If the same trend is to continue, the total amount that will have been raised by ICOs in 2017 will exceed $3 billion.
ICO projects, however, are not the only reason for the exponential growth of Ethereum during 2017. The developers of the cryptocurrency have dedicated a large amount of time and resources to the creation and implementation of new technologies, with the aim of improving the system. The exchange volume to transaction volume for Ethereum is shown below, suggesting that the blockchain network is increasingly being utilized for transactions rather than trading/speculation.
One such advancement is the most recent Byzantium hard fork, which allowed anonymous transactions to be processed through the integration of zk-SNARKs.
At this stage, commercial decentralized applications are unable to have private transactions settled, yet one such transaction was successfully processed through the Ethereum testnet – a mark of great progress for the developers.
Ethereum transactions are blazingly faster than bitcoin, and are much cheaper in terms of fees, which some would suggest makes ethereum a better alternative to bitcoin in terms of sending money. Also, another major reason for the large rise in the valuation of Ethereum is the increased volume it has enjoyed. The chart below shows that volume started getting larger around May 2017, with the 24-hour volume exceeding $1 billion in recent weeks.
Apart from lower fees and better transaction times, another reason which sets Ethereum apart from Bitcoin is solid community which is united. While Bitcoin keeps forking and having it’s internal civil war. The internal rivalry of bitcoin instills fear of instability in some investors. To see the rivalry, just head over to /r/btc and notice that this 100k members “bitcoin” community is heavily polarized towards Bitcoin Cash (BCH) and do daily bashing of r/bitcoin which is the community which supports the old bitcoin.
Recently, a game on Ethereum blockchain – called CryptoKittes got most of the Ethereum community hooked on it. People have already spent over $1 Million in buying thes virtual cats. The genesis cat got sold for ~246 ETH (around $113,000). This is the first game on blockchain which has faced such attention from media. It has been reported almost 10% of transactions happening on entire Ethereum are for this CryptoKittes. Ethereum has potential to evolve in future as a gaming platform as well.
Ethereum provides a solid platform for developers to build on it, and the drastic climb of the price of ether in 2017 is a testament to this.
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