Reasons behind skyrocketing price of Ethereum

According to CoinmarketCap, the Ethereum price has increased by more than 16% within the last 24hrs.

The cryptocurrency reached a high of $747 Wednesday before going back to $657 same day. And then shooting to 753 and then back below $740 at the time of this writing. The new price puts the cryptocurrency market cap at above $70 billion.

While Ethereum has struggled to attain a price of above $500 since September. The run in the last 2 days is something to note. No doubt the cryptocurrency is faster in transaction and has more apps than Bitcoin.

Ethereum has been the 2nd largest digital currency in two yrs now. Thus it has been always on positive side, generally speaking. There is more than 6800% increase in Ethereum price since 2015 debut.

The most obvious question for many would be why Ethereum price is rising at the moment.

But it is not only Ether that has been rising: Litecoin and Dash also gained. The Litecoin recording more than 80 percent increase in value. Like Ether, Litecoin also struggled to remain stable and $100. The rise could be as a result of increase in demand of cryptocurrencies. As CBOE launched Bitcoin futures contracts last Saturday.

The price is probably partly being pushed by movement of more capital and wealth from traditional finance markets to crypto markets. Some people in the cryptocurrency scenes pointed out that the move would act as a legal stamp on cryptocurrencies in general.

Also Read: The first official Zug ID registration available on Ethereum Blockchain

During this week, popularity of Ether in South Korean market has increased. The leading exchanges in the country, namely Bithumb, Coinone, and Korbit started to increasingly trade Ether. For instance, South Korea’s largest exchange accounts Bithumb for more than 11 percent of global Ether exchanges although U.S.-based GDAX had an equivalent share as of yesterday.

Also, after the Cryptokitties drama, The Massive Autonomous Distributed Reconciliation program (Madrec) project, which comes to effect on January 3, was announced this week. Led by  UBS with involvement from Barclays, Credit Suisse, KBC, SIX and Thomson Reuters, this project aims at helping banks use Ethereum contracts to collect data without compromising sensitive information, increase security, and to lower costs related to data collection and storage.

There is also another effect: increase in value of CryptoKitties and EtherDelta dapps.

CryptoKitties marketplace became largest dapp on Ethereum with more than 1.3 million worth of cartoon kittens traded at the marketplace up to this month. Prior to that a major decentralized cryptocurrency exchange EtherDelta was the largest dapp on Ethereum.

Ethereum co-founder Vitalik Buterin said afterwards that ‘CryptoKitties is a reflection of the world at large.’

But Ethereum, which settles about 830,000 transactions on a daily basis, more than Bitcoin transactions and those in other cryptos combined, has price increase limited by the limit in the transaction processing.


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Qadir AK

Qadir Ak - Co-founder of Coinpedia Blog - His interest as crypto Author, Editor, Speaker at cryptocurrency conference has made him known as passionate blogger and startup in Asia.

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