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Ethereum Price Spike Ethereum Price Spike

Cryptocurrencies

Ether Up 63% This Month: What’s Going On?

 2 min read / 

The Story

Ether, ethereum’s associated cryptocurrency, has recently hit an all-time high of $480, an increase of 5,200% this year and 63% this month. While some believe this is a result of the cryptocurrency finally getting the attention it deserves, others are declaring the entire cryptocurrency space a bubble.

Ethereum price spike

Source: coinmarketcap.com

Why It’s Important

When an asset’s price rises well above its fundamental value, the asset is in a bubble. Ether’s 5,200% increase brings into question whether its price reflects the value proposition of the underlying technology. Sceptics argue that ether’s price rise is fuelled by speculation, using the outlandish increases to support their view.

Those who believe in Ethereum argue the company uses blockchain technology to solve real problems; as people realise its potential, ether’s price rises. Ethereum provides a generalised blockchain, allowing developers to build decentralised applications on the company’s network. Ethereum’s applications include insurance, managing personal information and micro-finance. Using blockchain technology, new computing solutions can be found to old problems.

What Else to Watch Out For

Earlier last week, ex-Fortress Investment Group Fund Manager Mike Novogratz told Bloomberg he expected ether to hit $500 by the end of the year. The investor is starting a $500m cryptocurrency hedge fund. Interest in cryptocurrencies is at an all-time high as Coinbase, the most popular US cryptocurrency exchange received 10,000 new users on Thanksgiving. Bitcoin, the most popular cryptocurrency, is rapidly nearing $10,000. Its price has increased by 1,200% this year, and 66% this month.

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