You may have noticed last week that the Ethereum Price tracker had relaunched with a new design and a couple of new features. Most importantly, we’re back to real-time updates as well as hourly and 12 hourly graphs to get a more granular view of this fast changing market. Your feedback and feature requests are always read, Tweet or email me if you’d like to have your say!
Ethereum price growth relatively slow
November/December have historically been better than average months for the stock market and over the last few years the same has been true for many cryptoassets. The price of Ethereum has not rocketed as fast as some of the other top 10 cryptos (notably Bitcoin, Litecoin and DASH), however the asset broke its all time high to reach $544.83 in the early hours of this morning (UTC). The reason for the relatively slower growth is broad, but likely to be a combination of uncertainty around ICO regulation, smart contract exploits, network congestion and misinformed concerns over the “infinite” supply of Ether. As will be discussed in the next article – predictions for Ethereum in 2018 – this downward pressure is likely to be flipped on its head in the coming 12 months.
Why did Ethereum break its all time high?
Bitcoin began trading on CBOE, the first major exchange to accept the cryptoasset, on December 11th. The opening hours at the exchange were so popular that CBOE’s trading platform was halted twice as the price rose to nearly $19,000 USD. The implications for Bitcoin were huge, but as is common during a Bitcoin rally, other cryptoassets positively correlate with the bullish outlook. This impact is only likely to get stronger as other major exchanges follow suit (CME Group will introduce Bitcoin later this month) and a Bitcoin exchange traded fund (ETF) seems incredibly likely in 2018. The impact of this on Ethereum is two fold: firstly, Ethereum is almost certainly destined to follow suit, with Ethereum futures and an Ethereum ETF likely at some point in the next two years. Secondly, with mainstream exchanges legitimising cryptoassets, the fear of heavy handed regulation may be subsiding.
Cryptokitties has generated $1.3M in sales, accounts for as much as 4% of all Ethereum transactions and its unprecedented popularity was responsible for delaying ICOs and congesting the network last week. The game allows users to breed and auction cat graphics on the internet for admittedly absurd prices, with the Ethereum blockchain acting as a tool secure and transfer ownership. Countless experts have ridiculed the game, citing it as a fad which is destined to fizzle out. Whilst those experts are almost certainly correct, the importance of this game has little to do with its content – this is the first Ethereum application to make the utility of the blockchain accessible to the masses. As silly as it sounds, the industry will look back on Cryptokitties as a watershed moment for mainstream blockchain adoption, and is a glimpse of what is to come in the years ahead. If you’re still not convinced, I urge you to read this.
Ethereum Transactions and NVT
Many consider the Net Value to Transaction ratio (NVT) to be equivalent to that of the price earnings ratio used in public stock valuations. NVT considers how the network value compares to its total transaction volume (in USD). A higher NVT would imply an overvaluation of the blockchain network, whilst a low NVT would suggest that it may be under priced. Ethereum has had very little media attention surrounding its transaction volume; which reached an all time high yesterday of over 800,000 in 24 hours. At a price per coin of $525 and a market cap now in excess of $50B, Ethereum will have the lowest NVT of the top coins (by market cap) if the transaction volume is sustained. For comparison, Bitcoin currently achieves roughly 350,000 transactions per day – the upper limit of what the Bitcoin blockchain is able to process under current consensus rules.
Despite Ethereum currently breaking through an all time high, the excitement in the industry combined with the genuine utility of this blockchain seems a likely recipe for yet further explosive growth in 2018.