Yasin Ebrahim
Investing.com – Ether topped an unprecedented $4,000 level Monday, on signs the number two crypto is starting to rival bitcoin as a destination for crypto dollars after its dominance level hit a more than three-year high.
ETH/USD rose 5.78% to $4,125.20 and hit a record high of $4203.98. While BTC/USD fell 1.59% to $56,567.60.
Ether, or ETH, which some have hailed as "digital oil," is used as a form of payment on the Ethereum network. This network, likened by some to a "supercomputer," pays a vital a role in helping developers create the new blockchain economy.
That economy is where future applications -- be it financial such as insurance, or cultural such as digital art – will not be controlled by a single person or company, but by a decentralized network of computers around the world.
The idea is that users can be certain that the network won't be taken down by some outside force, and that their data will remain not only private, but secure.
Ethereum, unlike bitcoin, took blockchain technology a step a further by using the tech not only for decentralized payments, but also to store computer code, or smart contracts, that form the building blocks of decentralized applications.
As these applications become more mainstream, demand for eth, needed to fund transactions on the Ethereum network, is expected to rise. The runway for bitcoin, however, as a store of value or "digital gold," is limited, with some estimating it could usurp gold's market cap of $10 trillion by the end of this decade.
But beyond bitcoin's ability as a store of value and a protection against rising inflation, there isn't much else to get excited about. Some believe this was always bitcoin's destiny as it was founded as way for people to send money over the internet, free of central control.
There are signs investors are starting to see Ethereum's promise as the crypto dollars appear to be skewing toward ETH.
ETH's dominance rate - the ratio of ETH market cap over total market crypto cap – rose to about 20%, the highest since February 2018. While BTC's dominance rate has fallen below 45% to its lowest level since July 2018.
"The rapid growth of decentralized finance (DeFi) is the driver behind the appreciation in Ether price. The utility of programmable money is driving the realization that ETH represents a great long-term store of value," according to Manuel Rensink, Director of Innovation Strategy, Securrency.