Ethereum is the largest Defi (Decentralized Finance) network, second only to Bitcoin. It was launched in the year 2015 and has achieved several milestones since its launch. And recently it achieved yet another milestone by breaching the $4000 hurdle. Ether(ETH) has breached this level in the past for a brief period of time. But this time analysts believe it is there to stay.
The last time when Ethereum crossed this level was on May 12th, and it made a lifetime high of $4,384. But it fell the very next day as it couldn’t sustain the valuation then. This time it is not just Ethereum, but the whole crypto market is rejoicing over the fact that the US has launched its first Bitcoin Futures ETF. This move by the US provides confidence to crypto traders and investors.
How did Ethereum manage to reach the $4000 level?
Ethereum is the second most valued crypto in the world. It is popular for its unique features and lightning-fast platform. It has some unique features that Bitcoin doesn’t have, like Smart Contracts. Ethereum was the first cryptocurrency to launch smart contracts. Smart contracts were first launched by Ethereum which led to its success in the crypto markets. Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They are typically used to automate the execution of an agreement so that all participants can immediately be certain of the outcome, without an intermediary’s involvement. Smart Contracts can also automate a workflow, triggering the next action when certain conditions are met.
Then Ethereum also helps facilitate NFTs(Non-Fungible Tokens) on its platform.
Non-fungible tokens (NFT)
Non-fungible tokens (NFT)- A way to represent anything unique as an Ethereum-based asset.
- NFTs are giving more power to content creators than ever before.
- Powered by smart contracts on the Ethereum blockchain.
Ethereum, like Bitcoin, was launched at around $1 in 2015, and since then it has given astronomical returns to its investors. It runs on Ether (ETH), its very own cryptocurrency that fuels its whole network. As mentioned above, Ethereum has gained popularity through its lightning-fast network. The transaction cost and time involved in Ethereum are lower than the Bitcoins network, which is excessively crowded.
Ethereum provides secure blockchain services to various companies. A blockchain network can store all kinds of data. It is the market leader in providing easy and safe Blockchain databases to businesses. Then its Defi and NFT services have seen multifold rise amid significant public interest. Ethereum is constantly working on developing its star features, like Smart Contracts. Which is one of the major drivers of its network.
Another feature of the Ethereum network is its usage of the PoS(Proof Of Stake) system for validating transactions and mining new blocks.
It is more environmentally friendly than the PoW(Proof Of Work) network that Bitcoin uses. Ethereum’s Proof of Stake mechanism does not require a lot of energy for mining blocks. You can also mine blocks and validate transactions on the Ethereum Blockchain with the lesser and cheaper hardware equipment. In the PoS mechanism users don’t need to solve complex algorithms like Bitcoins PoW. Instead, the users just need to prove that they have put enough ETH at stake.
What should investors do?
The current Ether valuations are totally justifiable by its increase in NFT and Defi services. And the increasing usage of cryptos as a mode of payment. Also, most countries are now starting to accept and form easier regulations to formulate crypto transactions for their users. As big companies are actively investing and supporting cryptocurrencies as a mode of payment. PayPal was the first major player in the market to facilitate crypto on its platform. And recently Mastercard came out with new features facilitating crypto transactions through its payment mechanism. Another major factor is the valuation gap between Bitcoin and Ethereum is still around threefold, which it may eventually cover.
So, in the end, Ethereums’ valuation and its price are both at good levels. In fact, investors looking for long-term investments in crypto can take fresh entry into Ethereum as well.