Fresh new record! Ether, the native cryptocurrency of the Ethereum blockchain, reached a new peak price of around $2,800 early Wednesday, widening its lead over market leader Bitcoin.
The world’s biggest cryptocurrency has kind of stalled at below the $55,000 mark, which has resulted in action shifting to the second-biggest cryptocurrency on the planet. Ether rose to $2,800, surpassing its previous high of $2,762.
And the trend looks set to continue, amid increased capital flow into Ether.
The digital coin has rallied by 43% so far this month, decoupling itself from Bitcoin, which is down 7%.
In fact, the ETC/BTC ratio has now jumped to a 2.5-year high above 0.050, confirming a major bullish breakout on technical charts. With no further resistance, there are expectations that this ratio will push through 0.10 eventually.
Ether funds and investment products drew $34 million last week, while Bitcoin funds lost $21 million.
As Meltem Demirors, chief strategy officer at CoinShares, told CNBC earlier this week, the demand is shifting and capital is moving from one asset to another. Analysts foresee continued Ether outperformance.
And one of the reasons for this is the looming arrival of Ethereum 2.0, which will offer cheaper fees and less supply. The upgrade will see the blockchain switch to a Proof-of-Stake consensus mechanism by the end of this year or early next.
Then there are plans to implement what is called a sharding upgrade that will expand the Ethereum capacity to process transactions by splitting its database into 64 mini blockchains. That, too, may bring down transaction fees, bring more activity to the network, and lead to stronger demand for Ether.
This ongoing capital rotation out of Bitcoin and into Ether is likely to continue over the coming months.
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