Ethereum creator Vitalik Buterin.
Ether, the native currency of the Ethereum network and the second most valuable cryptocurrency, has soared above $1,000 for the first time since 2018. The rise is part of a broad cryptocurrency boom inspired by the continued rise in bitcoin’s price.
Last month, bitcoin rose above $20,000, smashing its previous all-time record of around $19,500. Since then, it has continued to rise, breaking above $30,000 in recent days. As I write this, one bitcoin is worth around $31,000.
Cryptocurrencies tend to rise and fall together. So it’s not surprising that other virtual currencies are also on the rise. Ether has seen dramatic gains over the last year. At the start of 2020, one ether was worth around $140. The price rose to around $600 in late November, the same month bitcoin started flirting with a new record. In the last few days, ether has been on a tear, rising from $600 on Christmas Day to more than $1,000 today.
It isn’t just ether. Litecoin, one of the oldest “altcoins,” has seen its value triple over the last three months to $150. Bitcoin Cash, a variant of bitcoin that’s optimized for high transaction volumes, has nearly doubled over the same period and is now worth $400.
A new cryptocurrency called Polkadot has tripled in value since it was introduced in August. Polkadot was co-founded by Gavin Wood, who was also a co-founder of Ethereum, so investors are hoping it will be the “next Ethereum.” Polkadot has already become one of the 10 most valuable cryptocurrencies, eclipsing virtual currencies that have been around for much longer.
Recent months have also seen continued growth in Tether, a cryptocurrency whose value is pegged to the US dollar. Cryptocurrency traders like Tether because it enables them to hold virtual dollars without the paperwork hassles imposed by the conventional banking system. While experts have long warned about the currency’s shaky foundations, it has maintained its $1 peg for several years. Over the last year, the value of Tether coins in circulation has grown by a factor of five—from $4 billion in early 2020 to $21 billion today.
One exception to the general bullishness of the cryptocurrency market is XRP, the currency of the Ripple network. Just before Christmas, the Securities and Exchange Commission charged two Ripple executives with selling unregistered securities. The SEC action looks all the way back to the original issuance of XRP in 2013, raising doubts about the legal foundations of the Ripple network. The announcement has caused some US cryptocurrency exchanges to stop offering trades in XRP. XRP has lost two-thirds of its value since a November peak.
Overall, bitcoin continues to dominate the cryptocurrency market. The value of all bitcoins in circulation is $580 billion. The number two cryptocurrency, ether, is worth $115 billion. Tether is worth $21 billion, and XRP is worth $10 billion. No other cryptocurrency is worth more than $10 billion, and the value of all other cryptocurrencies put together is about $120 billion, according to CoinMarketCap. Bitcoin accounts for 68 percent of the value of the entire cryptocurrency market.