Continuing with its strong market rally, Ether, the native cryptocurrency of Ethereum network surged past 4,000 dollars for the first time today. Ether has yielded almost 454% in 2021 alone, making it the second-largest cryptocurrency in the world with a market capitalization of 460 billion dollars, second only to Bitcoin, which currently stands at 1,081 billion dollars.
The rapid surge in dogecoin price, which has levelled out since then, has yielded almost 8,000% in 2021. However, unlike the dogecoin mania, which was fueled by Elon Musk’s push to the dogecoin and anticipation of its discussion in his SNL performance, Ethereum seems more rooted and safe.
Ether is largely being considered central to the concept of decentralized finance or DeFi, where digital platforms can effectively challenge the institutional dominance of banks as hubs of financial transactions. Apart from this, the platform is also being recognized for its multiple practical applications, apart from simply being a store of value.
Siddharth Menon, Co-founder at Wazir X feels quite bullish on the potential of Ethereum. “Ethereum is an amazing innovation. It is the world’s biggest decentralized virtual machine network and the foundation for many decentralized apps and fundamental businesses. It is revolutionizing the decentralized internet much as Amazon AWS transformed the global technology structure.”
While Menon thinks that the cryptocurrency is currently undervalued, there is no doubt about the popularity and acceptance of the network, given many high-profile projects are being developed on it.
He is not alone in his optimism. Ramalingam Subramanian, head of brand and communications at CoinDCX, one of India’s largest cryptocurrency exchanges also believes in the sustainability of Ethereum rise. “Unlike bitcoin, Ethereum is a programmable blockchain, which has captured the interest of many investors, software developers and startups around the world. It is also transforming into its version 2.0, which will make it more liquid, accessible and environment friendly as a platform. While there will be market corrections, things are moving in the right direction for the network, ”he says.
The positive investor sentiment for the currency is also testimony to its growth. As investors move beyond bitcoins and other cryptocurrencies, Ether is favored by people as a long-term investment that comes with stability and value.
Karan Anand, an avid cryptocurrency investor thinks the same. “I am planning to invest soon in ether. Unlike other cryptocurrencies, it is not as volatile and hence, a safe avenue. Experts label it as safe, so there is no reason why I should not consider putting money here.”
Ethereum blockchain empowers smart contracts, which allow creation of contracts that do not require a third party for execution. In other words, it can be set and carried out simply by the two individuals party to the contract. Since it is accessible world-wide, it offers potential for bypassing traditional financial mechanisms and allows greater control to the involved parties over the value and movement of the digital assets. In addition, it also solves a key environmental concern of massive energy consumption in crypto mining by introducing PoS (Proof of Stake) which will work by granting mining powers to owners in direct proportion to the number of coins they hold.
However, most of these applications are yet to be brought to life. It is unclear how these operations will be implemented in India. Perhaps that’s why Chennai-based investment and strategy advisor Pranay Sultania, is a little skeptical about taking the plunge in this asset class. “I’ve been reading about blockchain and cryptocurrency. However, at the moment, I haven’t taken a call on whether I want to invest or not.”
(Except for the headline, this story has not been edited by TTE staff and is published from a syndicated feed.)
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