I highlighted the rally in Ethereum that took the cryptocurrency to a new all-time high in my August Barchart recap on the price action in commodities. Ethereum posted a 16.45% gain in August, closing the month at $4,345.331 after rising to a new record high of $4,953.929 per token.
I late September, Ethereum was marginally higher than the August closing level, but the bullish trend remains firmly intact.
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Ethereum is the second-leading cryptocurrency
Ethereum and Bitcoin dominate the cryptocurrency asset class.
The chart highlights Bitcoin’s $2.321 trillion cap and Ethereum’s $541.258 market cap. The combined $2.862 trillion is over 70.8% of the entire cryptocurrency asset class’s $4.04 trillion value. While Bitcoin is worth over four times more than Ethereum, Ethereum is worth nearly three times more than third-place Tether, a stablecoin tied to the U.S. dollar.
The difference between Bitcoin and Ethereum
The primary difference between the two leading cryptocurrencies is that while Bitcoin is designed to provide an alternative to physical or fiat currency, Ethereum is intended for complex smart contracts and decentralized applications. Ethereum’s design is crucial for the emerging and theoretical infrastructure of the future of the internet, also known as Web3.
Web3 is the next iteration of the internet, utilizing blockchain technology to establish a decentralized ecosystem that empowers users with greater control and ownership of their data and digital assets, rather than relying on large corporations.
Bitcoin and Ethereum are complementary, not competitors. Bitcoin is akin to digital gold, due to its scarcity and durability. Bitcoin is a means of exchange that employs a “Proof-of-Work” consensus algorithm to broadcast, store, and confirm transactions.
Ethereum is more than just a digital asset; it is a decentralized platform enabling the development and execution of smart contracts and other decentralized applications. Ethereum is transitioning to a “Proof-of-Stake” blockchain consensus mechanism, where network participants, or validators, are chosen to create new blocks and validate transactions based on the amount of cryptocurrency they “stake” or lock up as collateral.
