If cryptocurrency investors were looking for a way to balance their Bitcoin holdings, they may have found the answer. Ethereum, the world’s second-most held cryptocurrency, shot up 7.43% in the last 24 hours -- taking it past the $4,000 value mark for the first time.
Bitcoin’s not going away, mind you. It currently holds 43.86% of the crypto market value, a decrease of 0.83% since yesterday, according to Coinmarketcap. However, the overall global crypto market cap saw a 2.63% increase since yesterday, sitting now at $2.46 trillion.
What’s the difference between Ethereum and bitcoin?
Unless you really get into the weeds of the cryptocurrency world, there isn’t much of a difference between Ethereum and Bitcoin for the common investor. The biggest differentiator comes from Ethereum’s use of “decentralized finance” (often referred to as DeFi). DeFi is a blockchain-based method of finance that doesn’t rely on central financial middlemen such as brokers or banks. Instead, it utilizes smart contracts on blockchains, the distributed computer system that underpins many cryptocurrencies. And guess what is the most common among those DeFi’ers? Ethereum.
Ethereum is also reaping rewards as non-fungible tokens, or NFTs. NFTs have become a digital darling in the past year, allowing digital files like art and sports memorabilia to be sold and auctioned online.
Think before you leap
Ethereum may be at $4,000 now, but it’s had some serious roller coaster rides in the past and could again. In early 2018, the cryptocurrency’s price ballooned to nearly $1,500 but wound up under $100 by December 2018.
If all the Ethereum action has you thinking about buying some, make sure you do your homework. Whether it’s Bitcoin, Ethereum, or Dogecoin, there is still a high amount of volatility when it comes to holding cryptocurrency assets. Consider checking out ConsumerAffairs’ list of Bitcoin IRA companies to connect with experts that can put you on the right path.