Insights

Could the Ethereum price track Bitcoin to new record highs?

Darren Abrahms, co-founder of Aus Merchant Investments, on the investment theses for the world’s top 2 cryptos.
The post Could the Ethereum price track Bitcoin to new record highs? appeared first on The Motley Fool Australia. –

The Ethereum (CRYPTO: ETH) price is up nearly 9% since this time yesterday and more than 15% over the past week.

Ethereum is currently trading for US$4,174 (AU$5,564). That gives the world’s number 2 crypto a market cap of some US$492 billion, according to data from CoinMarketCap.

The recent run of gains also sees the token closing in on its all-time highs of US$4,362, set on 12 May this year.

With Bitcoin (CRYPTO: BTC) having just smashed through its own previous record to reach new all-time highs this morning (details here), investors may be wondering whether Ether will be the next major token to break into new highs.

How Ethereum stacks up to Bitcoin

To gain an insight into the different investment thesis driving the resurgent Bitcoin and Ethereum rallies, The Motley Fool turned to Darren Abrahms, co-founder and managing director of digital currency provider Aus Merchant Investments.

Abrahms told us that, “Bitcoin is to gold, what Ether is to equities. Both have unique pros and cons and both have a place in the larger digital asset ecosystem.”

He continued:

Bitcoin and gold are both forms of ‘hard’ money and the central investment thesis for both assets are that they are an effective hedge against inflation… Unlike the supply off fiat currencies… the supply of both Bitcoin and gold are finite… It’s also censorship resistant, as it’s maintained by an international, decentralised network of computers, all of which have a copy of that same distributed ledger.

A core difference between Bitcoin and Ethereum, Abrahms added, is that, “Bitcoin has limited utility outside of savings and peer-to-peer remittance.”

On the other hand, “Ethereum and its native token Ether are far more than a form of digital money. Ethereum’s ability to facilitate smart contracts is a paradigm shift from Bitcoin.”

Ethereum is a platform, upon which a multitude of decentralised applications are built. These decentralised applications or ‘dapps’ as they are often referred to, are part of a revolution in the computing space known as web 3.0… While Bitcoin is central to the Web 3.0 movement, it’s use case is limited. Ether, and other smart contract blockchains have an almost infinite number of use cases.

Dapps built on Ethereum, Abrahms explained, “allow users to: borrow, lend, swap, utilise derivatives, and earn yield on their digital assets in a permissionless manner”.

Atop that, “Ethereum by holding the Ether token, affords investors indirect exposure to all dapps built on its blockchain.”

First mover advantages

Abrahms told The Motley Fool he believes, “Both digital assets will be a useful hedge against inflation and therefore an effective store of value. However, Bitcoin’s first mover advantage and simple value proposition means that it will continue to dominate the attention of investors seeking a hedge against inflation.”

As for Ethereum, he said, “While Bitcoin has the first mover advantage in the inflation hedge use-case, Ether has the first mover advantage in the smart contract ecosystem.”

However, Abrahms added this note of caution for the Ethereum outlook:

While Ether’s first mover advantage should not be overlooked, Ether has more direct competitors than Bitcoin. Post the 2017 ICO [initial coin offering] craze, there have been very few blockchains trying to rival Bitcoin’s dominance as a mode of peer-to-peer value transmission and none have succeeded. Conversely, there are new smart contract platforms that have different value propositions to Ethereum, which are unique to the relevant blockchain’s technology stack.

How has the Ethereum price been performing?

One year ago, Ethereum was trading at US$413. At the current Ether price of US$4,177, that represents a gain of 911%.

That’s more than double the 400% price gain posted by Bitcoin over the past 12 months.

Will that trend continue over the next months or will Ethereum return to lows of US$1,785 posted on 20 July, or even lower?

Only time will tell.

The post Could the Ethereum price track Bitcoin to new record highs? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Ethereum right now?

Before you consider Ethereum, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Ethereum wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why the Bitcoin (CRYPTO:BTC) price is rocketing to new, all-time highs

Newcrest (ASX:NCM) CEO reveals the company’s gold, copper and Bitcoin mining plans

BITO, the first US Bitcoin ETF just started trading. Here’s what happened

Here are the pros and cons of investing in the pending US Bitcoin ETFs

Why Bitcoin miners are flocking to the US and what this could mean for Australia

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!