In terms of aggregate market capitalization, the price rally has assisted Ethereum in surpassing organizations such as The Walt Disney Company and Bank of America. The world’s biggest smart contract-supporting layer-one has appreciated 24% in a week to $346.72 billion, as per monitoring website Infinite Marketcap.
In comparison, Bitcoin is currently commanding a market capitalization of $1.079 trillion, slightly lower than the aggregate market cap of the precious metal silver, which has a market cap of $1.416 trillion, and over social media enterprise Facebook at $923.12 billion.
The stunning rally has even sparked fresh speculation that Ethereum (ETH) could eclipse Bitcoin (BTC), surpassing the latter as the top cryptocurrency across the globe. Numerous tailwinds were responsible for the price rally of Ethereum.
The foremost is the continuing rise in activity on the chain, including that of institutions. Earlier last week, the European Investment Bank (EIB) stated that it would be distributing a two-year digital bond valued at $121 million in partnership with banking firms such as Goldman Sachs.
The interest of retail investors in DeFi (decentralized finance) has also been increasing, with total value locked figures hitting a steep high of over $100 billion.
Nevertheless, the “London” hardfork, which consists of EIP-1559 update to Ethereum’s fee framework, and also the consequent ETH 2.0 transformation to a PoS (proof-of-stake) consensus model, are the crucial events anticipated by investors. These overhauls to the network are anticipated to considerably cause a drop in fees, and also minimize the quantum of ETH offered as reward to miners, which on the other way is anticipated to reduce selling pressure on Ether.
David Hoffman, who runs the Ethereum educational media firm Bankless, has compared several measures to three distinct ‘halving’ events that happen about once in four years causing the Bitcoin block reward to get minimized by half. Halving events are believed to pave way for Bitcoin’s price rally.
#Ethereum‘s three halvenings are not priced in
— DavidHoffman.eth Ξ🦇🔊💰 (@TrustlessState) April 22, 2021
Nevertheless, Ethereum is facing tight contest from a handful of smart contract-enabled layer-one chains. The rising popularity of Ethereum is partially blamed for exorbitant transaction charges on the chain and on the lack of viable layer 2 scaling systems such as rollups, implying numerous competitor chains have recorded a jump in transactions.