The price of the Ethereum network’s native token, Ether has risen by over 5,700 percent in 2017. The market valuation of Ethereum recorded a 64-fold increase from $700 million to $45 billion, officially becoming the best performing cryptocurrency in the market year-to-date.
Billionaire hedge fund investor and former Fortress executive Mike Novogratz expressed his optimism in regards to the short and mid-term price trend of Ether, stating that Ether is at an optimal position to lead strong rallies and sustain upward momentum.
“Just in the last few days ethereum has started to move, and I actually think it’s going to put a new high soon. I think we end the year at close to $500 in Ethereum,” said Novogratz.
Several analysts believe that the Ethereum market cap has risen mostly due to the exponential growth of the initial coin offering (ICO) market. By the end of 2017, ICOs are expected to have raised a total of $3 billion, given that more than $2.8 billion has been secured by ICO projects throughout the past 11 months.
But, another reason for Ethereum’s rise this year is the increasing amount of activity from Ethereum developers who work on implementing new technologies to improve the network.
One notable project is the latest Byzantium hard fork which saw the integration of Zcash’s ZK-SNARKs, effectively enabling private or anonymous transactions to be processed on the Ethereum network. Currently, it is not possible for commercial decentralized applications to settle anonymous transactions on the Ethereum network. But, the Ethereum development community has made significant progress with the technology, given that a confidential ZK-SNARKs transaction has been processed on the Ethereum testnet.
In a study released in July of 2017, Ivey Business School professor and researcher JP Vergne revealed that the most accurate predictor of a cryptocurrency’s exchange rate, or price, is the developer activity around the cryptocurrency’s blockchain network.
“We found that the best predictor of a cryptocurrency’s exchange rate is the amount of developer activity around it,” said Vergne.
The statement of Vergne based on the findings of his study entitled “Buzz Factor or Innovation Potential: What Explains Cryptocurrencies’ Returns?” has certainly been true, given Ether’s 5,700 percent increase in value this year.
Non-ICO Decentralized applications such as EtherDelta and CryptoCribs have also started to demonstrate significant commercial success, and have begun to compete against centralized systems in the cryptocurrency market.
As Coinbase co-founder Fred Ehrsam noted, decentralized exchange protocols built on top of the Ethereum protocol could become a major factor for the long-term price surge of Ethereum, if decentralized applications can challenge multi-billion dollar cryptocurrency trading platforms like Coinbase in the upcoming years.
“Zooming out a bit, the future of decentralized exchange is mind boggling. The number and scope of assets that become tokenized will exceed what we see in current financial markets by orders of magnitude. Thanks to decentralized exchange protocols, those tokens will be tradable on unified global markets,” wrote Ehrsam.
Ultimately, the strong performance and rapid growth rate of decentralized applications, combined with the increasing developer activity of the Ethereum open-source development community will contribute to the long-term rise in the price and market valuation of Ether.
https://coinjournal.net/price-ethereum-risen-5700-2017/
