Ether hit its highest level since mid-May on Wednesday, driven up by a wave of investors chasing profits on popular alternatives to Bitcoin that have soared in recent weeks.
Ethereum’s ether token rose at times by up to 7% to a high of over $ 3,560. It was last up around 3% to $ 3,530.
Although Bitcoin is still the most actively traded cryptocurrency, many of its smaller competitors such as Ether, the Ada of the Cardano network, or the Point of the Polkadot are gaining market size. These smaller blockchains offer a wider range of uses than bitcoins, including decentralized financial protocols and NFTs, among others.
NFTs are digital tokens tied to real assets such as works of art, videos, and more.
The largest NFT platform, OpenSea, had its highest monthly activity ever at over $ 3 million in August, according to data from analytics firm Dune. That’s ten times more than the previous month as more celebrities, athletes, and luxury brands released their own NFTs.
Decentralized finance, or DeFi, is one of the applications of blockchain technology that has recently made the Ethereum network so popular. DeFi enables two parties to conduct transactions without a centralized intermediary, such as a broker or commercial bank.
“The attractive factor driving Ethereum’s growth is the DeFi and NFT mania that is currently causing a stir in the crypto ecosystem. With most of the NFTs being minted on the Ethereum blockchain, the demand for ether is higher and the price hike is further complemented by the high token burn rate initiated by the last London hard fork network upgrade, “said Petr Kozyakov, co-founder and CEO of the global payments network Mercuryo.
According to Coinmarketcap, ether is the second largest coin by market capitalization after Bitcoin.
“Ether could top the $ 4,000 mark as it did before when it hit an all-time high of $ 4,362.35,” Kozyakov said.
The Ethereum rally helped drive up the values of smaller altcoins, he said.
Dot rose 8.7% to $ 30.21 that day after previously hitting an all-time high of $ 32.10, based on Coinbase data.
Other altcoins like Chainlink’s link rose 6.21% to $ 27.58 within 24 hours, Ripple’s XRP rose 7.43% to $ 1.20 and Uniswap’s Uni-Token rose 8.29% to 30, according to coinmarketcap, $ 48 in 24 hours.
“The crypto-verse continues to grow, and while Bitcoin dominance is waning as other coins dominate blockchain technology adoption, long-term investors should be optimistic about the whole area,” Edward Moya, a senior market analyst at broker OANDA, said in a note on Tuesday.
Solana’s Sol token, which is up nearly 250% last month, most recently rose 10% on Coinbase to $ 119.46, while Cardanos Ada, now the third largest coin by market value, gained 2% over Coinbase to $ 2.829.
“Sol and ada have the potential for massive price gains in the coming months,” said Kozyakov. “(Your) potential claim of being an Ethereum killer will soon be tested with (Cardanos) Alonzo upgrade, which will allow smart contracts to be built on the network.”