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The rise of Ethereum, an in-depth look.

There is a 20 percent gain in the Ethereum price. In the past 24 hours, the global cryptocurrencies market capitalization has grown by 6.94 percent to $2.23 trillion. Currently, Bitcoin is trading 6 percent higher at $49,000, up more than 1 percent in a week.

Ether, the currency that fuels the Ethereum blockchain, has been trading independently of its bigger peer, bitcoin. The broader market used to be dictated by bitcoin, but the situation has changed recently.

Despite the recent upswing in bitcoin prices, the price of Ether has been rising by double-digits. As it nears USD 4K, the second-largest cryptocurrency based on market cap, which broke its all-time high occurred in mid-May, the cryptocurrency is now approaching USD 3,555.

Although Bitcoin’s position in the market has decreased slightly, Ethereum’s has surged to 20%. Ether rose about 30% in value in August, compared with bitcoin’s roughly 13% gain.

When Coinbase reported its earnings in early August, the cryptocurrency market got a glimpse of the latest market dynamics. Due to the rise of decentralised finance (DeFi) and non-fungible tokens (NFTs), Ethereum trading volumes surpassed bitcoin trading volumes for the first time in history.

An investor who is an alumnus of Goldman Sachs and the founder of Global Macro Investor, Raoul Pal, is also in favor of Ethereum. According to Pal on the Bankless podcast, Ether will cross USD 20K by next March. In the same period, he expects the bitcoin price to reach USD 250K-400K.

Approximately a year ago, Pal’s portfolio included about 25% gold and the rest was cryptocurrency assets, which included bitcoin and ether. The composition has changed since then, and now Pal has sold his gold allocation and has shifted to crypto. ETH now makes up more than half of his portfolio. Furthermore, he is also knowledgeable about DeFi assets, layer-one protocols, and other cryptos.

Bitcoin and Ethereum are often pitted against each other in the cryptocurrency community, but that is not the case everywhere. He said the firm doesn’t view the market through a competitive lens of bitcoin vs. Ethereum. There is possibility investors are now “moving away from bitcoin” to pursue gains in layer-one protocols. Nevertheless, investor rotation back to bitcoin is likely when the cycle reaches its end.

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