Why Ethereum Prices Bitcoin Reached Record Highs
Bitcoin has seen a turbulent few days, with volatile rises and falls in price levels and the general rejection of the Bitcoin ETF. But savvy investors have turned from Bitcoin itself to one of the digital currency’s closest networks, Ethereum. Ethereum has climbed quickly to a record high rate of $30 since last Thursday. The network’s market cap has risen by about $1 billion in the same period, and the 24-hour volume has tripled, according to CoinTelegraph. What may be driving these upticks, and are they likely to continue or to be short-lived?
Ethereum Spike Tied to Partnerships?
Ethereum may be able to credit its rapid gains to the Bitcoin saga which has played out over the past few days. This has certainly drawn in investor attention at a critical time. On the other hand, though, the fact that Ethereum’s spike is higher than networks of other currencies may have something to do with partnerships which it has had in the pipeline for some time.
Ethereum has been marketed to various potential corporate and government partners are a way of generating revenue through its integration of blockchain technology. A highly publicized partnership to manifest in recent weeks is the joining of forces representing JPMorgan Chase, Microsoft, and nearly 30 other companies to create a partnership known as the Enterprise Ethereum Alliance (EEA). The EEA has set as its aim the development of a single standard iteration of the Ethereum software for business of all kinds to use in order to track and manage financial contracts and data. The EEA as it stands is a nonprofit entity, but its aims nonetheless look toward generating revenue streams for the consortium companies and the broader business world.
Ethereum, Blockchain, and the Corporate World
Many companies have shown recent interest in utilizing blockchain technology for ledger procedures and other transactional documentation and certification. As such, Ethereum has made its goal to establish and build trust between its network and its corporate partners. It has done this by working to maintain transparency and to reduce costs associated with transactions, making Ethereum popular with companies and organizations as broadly diverse as the Federal Reserve, publicly traded financial institutions, and international government agencies. The effect seems to be cumulative: as more institutional and agency investors join along with Ethereum’s efforts, investors become more certain that there will be an increased number of transactions on the network. Then, investors are more likely to by up Ether, Ethereum’s digital token, supporting further growth for the network. While this is by no means guaranteed to remain the pattern, it does appear that Ethereum has set itself apart from other digital currency networks through its practices and partnerships so far.