Cryptos offering smart contract technology are drawing increasing attention.
The post Here’s what happened with the Ethereum price in 2021 appeared first on The Motley Fool Australia. –
Ethereum (CRYPTO: ETH) investors who bought on 1 January 2021 and sold on 31 December will have little to complain about.
Ethereum started the year just gone trading for US$730. It hit an all-time high of US$4,892 on 16 November before retracing. By the end of the year, Ether was worth US$3,683, a year-on-year gain of 406%, according to data from CoinMarketCap.
Now with the token’s significant daily price swings in mind, that yearly gain could be a bit more or less, depending on the time of day you bought and sold.
Regardless of timing though, the gain dwarfs the 63% 2021 gain posted by Bitcoin (CRYPTO: BTC). And with the recent run of price gains, Ethereum now represents more than 20% of the total crypto sphere by market valuation.
What differentiates Ether from Bitcoin?
All cryptos are not made the same.
Indeed, as we reported here, the top 3 performing cryptos in 2021 are all involved in blockchain related virtual gaming.
Like Ethereum, the number 4 and 5 crypto performers in 2021 are primarily involved in smart contracts.
Among Ethereum’s appeal is its real-world applications. It makes use of its own crypto, Ether, to serve as a platform for other cryptocurrencies. With decentralised finance (DeFi) growing rapidly, Ether’s ability to execute decentralised contracts has drawn significant investor attention.
Bitcoin, on the other hand, primarily serves as an alternative to fiat currency. That’s the money printed by sovereign states. You can use Bitcoin to buy and sell an increasing range of items. You can hold onto it. Or you can send internationally without having to go through any traditional intermediary banks.
Are competing cryptos a threat to Ethereum?
Ethereum’s blockchain enabled smart contracts could indeed be under threat from upcoming altcoins. Though they’re unlikely to unseat the number 2 crypto anytime soon.
In December, Ray Brown, market analyst at crypto exchange CoinSpot, told The Motley Fool that, “Ethereum’s scalability is one of the biggest hurdles that is currently limiting the success of its network and the countless dApps [decentralised applications] that run on the network.”
While the network is being upgraded in what’s knowns as Ethereum 2.0, the so-called Ethereum killers are circling.
“The competition to take the DeFi crown is heating up by what some are labelling as the Ethereum killers,” Brown said.
“Some of the contenders… are considered to be Cardano (CRYPTO: ADA), Solana (CRYPTO: SOL) and Polkadot (CRYPTO: DOT),” he explained. “Each of these cryptoassets tinker in the smart contracts space, each offering innovative advantages that Ethereum is currently lacking. They are all also building momentum quite quickly.”
While the competition may be looking to take some of the action, Ethereum’s 406% gains in 2021 appear to indicate that investors still have faith in the world’s number 2 crypto.
The post Here’s what happened with the Ethereum price in 2021 appeared first on The Motley Fool Australia.
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Ethereum and Bitcoin. 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.