Ethereum Price Continues To Rise Crossing $500

Focus, for the better part of the year, has been on Bitcoin, even though Ethereum network’s token, Ether, has been the best performing cryptocurrency in the market.

Ethereum market is on a roll, seen by its market valuation increasing from $700 million to over $40 billion.

Ethereum price has risen above the $500 mark after consolidating above $400.

The rise above the $400 psychological level, followed a period of consolidation after the cryptocurrency came under pressure from a number of factors.

Chart courtesy of coinmarketcap.com

China’s crackdown on cryptocurrency trading took a toll on investor sentiments on Ether. The digital currency bullish sentiments also took a hit on cryptocurrency investor, Mike Novogratz, warning that the currency might have hit its highs for the year, at the $400 mark.

Fast forward, things are finally looking up for Ethereum, as investors’ confidence on a further rally continues to grow. This year alone the price of Ether has risen by over 5,000% to be crowned the best performing cryptocurrency.

Fuelling the rally is an increase in developer’s interest in the Ethereum blockchain. The technology can be used to build applications that go beyond digital cryptocurrencies.For instance, Hewlett Packard has demonstrated how an application running on the technology can be used to power iRobot’s Roomba vacuum cleaner.

In addition, a number of factors which have contributed to Ether impressive performance for the year.

Bullish Analyst’s Sentiments

Billionaire investor Novogratz has once again reaffirmed his optimism that Ether could continue to trade higher, after initially warning it had touched its highs for the year. The sentiments helped push the price to highs of $473.

“Just in the last few days Ethereum has started to move, and I actually think it’s going to put a new high soon. I think we end the year at close to $500 in Ethereum,” said Novogratz.

The cryptocurrency billionaire said that he expected Ethereum price to hit the $500 mark before the end of the year given on the fact that there are a number of things happening around the ecosystem. His prediction came a month sooner than expected.

Looking ahead focus will be on the ETH market to see whether it will continue to attract institutional investors. A key driver of Bitcoin prices to record highs of $10,000 has been the acceptance of cryptocurrencies as an alternative means of settling transactions.

Initial Coin Offering Market Factor

The growth of the Initial Coin Offering market has also had a direct impact on the price of Ethereum rising by more than 5000%. ICO’s market is expected to raise more than $3 billion for projects before the end of the year, an indication of growing investor interest in the sector.

Initial Coin offerings have emerged as an efficient way for companies to raise money in exchange for a token of digital currency. While the token does not give an investor equity in the company, it can be used to do something with the firm.

Ethereum co-founder Joseph Lubin, believes that the number of tokens in existence will continue to rise as more ICO’s are carried via Ethereum Blockchain. The increase should have a direct impact on Ether price which should continue to rise.

New Technologies

Developers working round the clock to come up with new applications to improve Ethereum network also continues to drive the price of Ether. Recently, the network received a major upgrade with the integration of ZK-SNARKs hard fork.

The upgrade has made it possible for people to carry out private and anonymous transactions on the Ethereum network.The new feature means the network can be used for a number of things that require high levels of privacy and anonymity.

Currently, it’s not possible for commercial decentralized applications to settle anonymous transactions on the Ethereum network. However, Coinbase co-founder, Fred Ehrsam, believes decentralized exchange protocols built on Ethereum protocol could help drive the price of Ether going forward.

“Zooming out a bit, the future of decentralized exchange is mind-boggling. The number and scope of assets that become tokenized will exceed what we see in current financial markets by orders of magnitude. Thanks to decentralized exchange protocols, those tokens will be tradable on unified global markets,” wrote Ehrsam.

Banks, tech giants and organizations are coming together to build applications behind Ethereum. Enterprise Ethereum Alliance made up of Accenture, BBVA, BNY Mellon, BNP Paribas, BP, Cisco, Credit Suisse, ING, Thomson Reuters is one of the joint ventures that is set to demonstrate a pilot of a financial technology using an adaptation of Ethereum as the settlement layer.

The price increase of Ethereum is already having a ripple effect on other sectors. According to RBC Capital Markets analyst, Mitch Steve’s double-digit percentage rise in cryptocurrencies could drive more miners into the cryptocurrency mining business. It is also expected to cause established miners to expand their capacity by buying new GPUs.

Ethereum price hikes have already pushed the value of NVidia up as demand for the chip giant’s GPUs for mining continues to grow.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.Image courtesy of Antonio Gonzalo via Flickr