Months after blasting through the top-10 barrier, Bitcoin’s biggest alternative cryptocurrency Ethereum has now marched into the top-5 bracket comprising the most valuable names in the world. The second-largest cryptocurrency Ethereum, with a market cap of $403.84 billion – of Bitcoin’s $1 trillion value – is placed right after the market cap of Visa ($504.75 billion) and JPMorgan Chase ($478.49 billion) in the tally of the world’s largest financial services companies topped by Bitcoin, according to the data from CompaniesMarketCap. The market cap of Visa and JPMorgan Chase stood at $504.75 billion and $478.49 billion, respectively, as of May 6, 2021.
“Ethereum has always beenspecifically because it has provided a platform through which people can create Dapps (Decentralised Apps) and Smart Contracts that enable further blockchain innovation. These innovations have helped spur the growth and creation of tokens and NFTs and have helped decentralize finance,” Darshan Bathija, CEO of Singapore-headquartered crypto trading platform Vauld, told Online. NFTs are non-fungible tokens that, unlike cryptos, cannot be for another identical pass and are used to represent real-world objects such as a painting or a house.
Ethereum has exploded in the. The price has increased over 16 times from $206 as of May 7, 2020, to $3,465 as of May 6, 2021, while the market cap has $23 billion, according to data from CoinMarketCap. At the same time, cryptos cannot be compared to physical enterprises such as Visa, JPMorgan, etc., given that the former is a peer-to-peer software system. At the same time, the latter is a for-profit business; Ethereum, theoretically the 25th largest asset cap, showed data from CompaniesMarketCap. The most significant included precious metals such as gold and silver and ETFs, apart from public companies.
There are three main reasons Ethereum has been on a tear. First, the utility of Ethereum as a global financial settlement layer has increased significantly. There are now over $77 billion deployed in Etherium-based projects, and the number is rising. This uptick started in June 2020, now called the summer of Defi, and continues growing. On top of this, NFTs and other product innovations on top of Ethereum are now seeing large-scale adoption,” Edul Patel, CEO and Co-founder of automated crypto trading platform Mudrex told Financial Express Online.
The other two reasons are bullish market sentiment as crypto has become the darling of institutional investors, with over $14.4 billion flowing into crypto in the past 12 months, said Patel. Most, and investors want to diversify in crypto. Hence Ethereum and other coins have seen strong demand that is helping . According to Patel, the major announcement in the past couple of weeks, S&P, Grayscale, and others, towards building and is helping the Ethereum boom.