Ethereum reached $1000 in value on major exchanges, for the first time in its history; another milestone for the currency that was released in 2015. In a short period of time, it has become one of the top three Cryptocurrencies in the world, having a value second to only Bitcoin.
The new year has just begun but some altcoins have had a great start to the year. Overall, the combined value of all altcoin market caps increased by $140 billion because of which altcoins are now worth two thirds of the entire cryptocurrency market cap.
Ethereum is one of these altcoins that grew in the past few days. Following Bitcoin’s fall in value after South Korean government placed strict regulations, Ethereum’s priced bounced up and down before slowly creeping up in the past few days. It started from $426 in December and ended the year at close to $750. It finally reached the $1000 mark just recently and hit an all time high of $1045.
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A few days ago, Ripple overtook Ethereum to become the second largest cryptocurrency in the world (by market cap) and it also became the first ever altcoin (and second cryptocurrency in the world) to reach a $100 billion market cap. Ethereum has now also reached the $100 billion market cap count, adding its name to this exclusive list.
Although Ethereum is yet to hit $1000 on many exchanges, South Korean traders have substantially gotten its price up by bidding all the way up to $1322 which allowed its global average to rise to $1000 and above. Currently it’s close to $1000 on Binance, where most of the Ethereum trading is concentrated on (around 20% of the daily ETH volume).
It is likely that Ethereum’s surge to $1000 is because of the general altcoin surge that started in December which saw other currencies such as Ripple surge as well. Thus, Ethereum’s value may not remain in four digits for long once the market corrects itself. However, it’s also argued that another reason which contributed towards Ethereum’s rise is the announcement that the Casper consensus algorithm has entered Alpha testing, complete with public testnet, giving the network a way to make a transition from proof-of-work (PoW) to proof-of-stake (PoS).
Although the algorithm just reached Alpha phase and is far from being released, the fact that it has come this far into the testing phases is great news for Ethereum’s price. Ethereum’s developers believe that this algorithm will bring a lot of benefits for Ethereum’s network including the ability to deflate its currency by significantly reducing the inflation rate for its own currency.
This is possible through PoS as it takes far less electricity than PoW which gives incentive to the participants to validate transactions for lower rewards than what is currently given out to miners. If what miners receive becomes lower, then automatically the inflation rate for the currency decreases as fewer coins enter circulation.
One of the key problems of inflation is the loss of value over time. With inflation decreasing due to Casper’s consensus algorithm, individual digital coins will hold more value over time. This could allow the network to reach a deflationary state in which fewer coins are circulated (which would help keep inflation low too).
With all the inflation currently in the crypto market, people want a currency that would be stable and have real value later, Ethereum is the only option currently that might be able to achieve this deflationary state thus it would be wise to invest in Ethereum now before it gets too expensive.
With just 4 days into 2018, the cryptocurrency market has already seen so much growth, especially Ripple and Ethereum. How much would cryptocurrency grow by the end of 2018? Nothing can be predicted due to the volatility of cryptocurrency but one thing is for sure: Bitcoin will not be the leading currency more with other altcoins rising to prominence at an alarmingly fast rate.