Ethereum has made a new all-time high (ATH) by trading above the $3,000 mark, as ETH price reached the milestone on several major exchanges, including Bybit, Coinbase, and BitMEX.
It has been reported that the surge has helped Ethereum overtake institutions such as The Walt Disney Company and Bank of America in terms of total market capitalization. The world’s largest smart contract-enabled layer-one blockchain has grown 24% on the week to $346.72 billion, according to tracking website Infinite Market Cap.
However, by comparison, Bitcoin (BTC) is currently sitting at a $1.079 trillion market cap, right below the total market cap of the precious metal silver at $1.416 trillion and above social media company Facebook at $923.12 billion.
The report said that the remarkable run has even prompted renewed speculation that Ether could “flippen” Bitcoin, overtaking BTC as the largest digital currency in the world. Multiple headwinds share responsibility for Ethereum’s rise. The first is an ongoing surge in activity on the blockchain, including from institutional entities.
Earlier in the week, the European Investment Bank announced it would be issuing a two-year digital bond worth $121 million in collaboration with banking entities such as Goldman Sachs. Retail interest in decentralized finance has also been rising as of late, with total value locked reaching astonishing highs above $100 billion. The “London” hard fork, which includes the EIP-1559 overhaul of Ethereum’s fee structure, along with the subsequent looming Ethereum 2.0 transition to a proof-of-stake consensus model may be the prime events investors are anticipating. These upgrades to the network are expected to significantly decrease fees, as well as reduce the amount of ETH rewarded to miners, which, in turn, is expected to decrease sell-side pressure on the asset.
David Hoffman, a host for the Ethereum educational media company Bankless, equated the various initiatives to the equivalent of three separate “halvenings,” events that take place roughly every four years when the Bitcoin block subsidy is slashed in half.
Ethereum does have some competition in the form of other smart contract-enabled layer-one chains.
Thus, the growing popularity of Ethereum is partly to blame for exorbitant transaction fees on the chain, and the absence of viable layer-two scaling solutions like rollups means multiple competitor chains have seen a surge in activity.