We’ve spent a lot of digital ink on Bitcoin this week, and so has everyone else, given BTC’s meteoric rise – but the runner-up cryptocurrency, Ethereum, is also experiencing its own boom indicators, partially in the form of long-term holdings.
Jordan Lyanchev at Cryptopotato reports today that 77% of Ethereum reserves in external accounts have been dormant for at least six months, which speaks more to a long-term holding trend than it does to frantic and volatile day trading of this cryptocurrency resource.
What’s behind interest in Ethereum as an alternative to Bitcoin? For one thing, the smart contracts supported by the Ethereum platform are becoming valuable in the global business community.
“Ethereum is becoming the go-to blockchain protocol for enterprise business solutions based on several reasons, such as adoption, scalability and support,” wrote Jeremy Wall last summer in an explanation of the ongoing power behind Ethereum for enterprise. “Ethereum currently is known as the most popular public blockchain network for the development of decentralized applications (DApps) and smart contracts. Its prospective blockchain protocol is one of the few cryptocurrency projects actually achieving real-world adoption, with dozens of applications that can be divided into 11 major categories: open finance, decentralized exchanges, gaming, collectibles, marketplaces, developer tools, identity, governance, infrastructure, token-curated registries and Ethereum Request for Comments (ERC) token standards.”
Ethereum also has its upcoming catalyst event. Like the Bitcoin community, which is anticipating a halving of the coin’s miner reward in the middle of May, Ethereum holders also have something to look forward to: a new pending Ethereum 2.0 rollout, where the blockchain will get improvements to its proof of stake algorithms and more.
All that aside, the recent value of Ethereum has also been healthy:
“The price of Ethereum, similarly to most cryptocurrencies, went through violent turbulence lately,” Lyanchev writes. “Starting 2020 at about $131, reaching a yearly high of $290, and then succumbing to the mid-March sell-offs caused by the COVID-19 pandemic and bottoming at $87. Lately, however, the second-seeded coin by market cap has surged and is currently trading at $212, representing an increase of 62% in 2020 alone.”
So while you are consolidating your cryptocurrency portfolio, keep an eye on Ethereum in addition to any Bitcoin holdings that you have. The sector is green for now, but how you invest in cryptocurrencies makes a difference.
