The price of bitcoin and ether, the digital tokens that power the bitcoin and ethereum blockchains, reached new all-time highs today.
At press time, bitcoin had topped $2,500 and a total market capitalization of $40bn for the first time ever. Ether, currently the second-largest by market capitalization, hit $228.37 at roughly 13:30 UTC, according to CoinMarketCap. Ether, Ethereum’s token, has catapulted from $8.24 Jan. 1 to $203.30 yesterday, a 2,367% gain.
As of Wednesday evening, Ether’s price was $199.08, giving Ethereum a $18.295 billion market capitalization, marking a 5.49% gain in a 24-hour period, according to coinmarketcap.com.
What drives Ethereum?
While bitcoin’s rise feeds investors’ appetite for Ether and other altcoins, a host of factors play into Ethereum’s popularity, especially in the business and financial communities.
Ethereum supports smart contracts, contracts that automatically execute according to a computer algorithm when contract terms are met. Several financial institutions have invested in Ethereum technology to be able to use smart contracts.
The Enterprise Ethereum Alliance (EEA) recently formed to link technology providers with companies to use the Ethereum blockchain. The group includes Microsoft, Intel and JPMorgan. The alliance on Tuesday announced an additional 86 companies joined the group, enhancing Ethereum’s credibility. Toyota, which handles some $260 billion of yearly revenue, Samsung, the South Korean giant which manages some $300 billion of yearly revenue, The Depository Trust & Clearing Corporation (DTCC), which handles trillions, the San Francisco Stock Exchange and far too many others to mention,have all joined the alliance.
More than 83% of Ether buying was purchased using bitcoin a year ago, according to CryptoCompare. This Wednesday, bitcoin only accounted for 32% of the buying. Fiat currencies like the U.S. dollar and the Korean won have contributed a growing portion.
Ethereum also made history this week by becoming the most secure public blockchain, overcoming bitcoin for the first time ever since its inception, as measured by what it’s called a Köppelmann Constant.