With news that South Korea might be about to place an outright ban on digital currency trading, Ethereum and several other coins took a significant price hit mid-week. As it happens, however, Ethereum and other ‘utility coins’ are once again booming. In fact, with ETH prices now topping over $1,300, Ethereum is looking more and more likely to make headway toward $5,000 by the end of 2018.
Why is Ethereum Booming & What Makes Ethereum Different from Other Altcoins?
Digital currency offerings like Ethereum are called utility coins for a very good reason. Unlike Bitcoin which can only be used as a store of wealth, Ethereum tokens can be used to transact with directly and/or used on the ETH blockchain to trigger execution of ‘Smart Contracts.’
What are Smart Contracts?
Every blockchain based digital currency is effectively just a virtual ledger, one where transactions are recorded as tokens move between wallet addresses. With Smart Contracts, however, movement of tokens between Ethereum wallet addresses, can also trigger the execution of third-party computer programs.
Ethereum, if you like, isn’t just a cryptocurrency. As well as this, Ethereum is a decentralized virtual computer which anyone can use to build services powered by the ETH ecosystem.
Why Now Might Represent ETH’s Last Low Market Entry Poiny
Over the past 12-months, new blockchain applications being built on Ethereum, have resulted in Ethereum’s market capitalization reaching $124 billion. What really makes ETH special, however, is the fact that at present, only one in ten cryptocurrencies actually have real-world use cases.
According to a recent Bloomberg article, analysis of 226 Initial Coin Offerings (ICOs) found that only 20 digital currency tokens had a use after being issued. Coins like Dodge Coin, if you like, simply don’t do anything. Coins like Ethereum, on the other hand, are economically functional in that they can be used as both currency and ‘gas’ (payment for different network services) on the Ethereum blockchain itself.
Needless to say, with Bloomberg finding that only 10% of digital currency offerings have any kind of real purpose, all other coins have only speculative value. This is important as the Ethereum price hasn’t surged by 13,000% in a single year, as a result of speculation. Instead, past and present ETH prices are a result of investors realizing ETH’s potential as both a currency and constantly evolving digital utility.
Should You Buy Ethereum Now or Wait for the Next Correction?
Because Ethereum is currently on a similar price trajectory to Bitcoin, now is definitely a time to buy rather than risk waiting for prices to correct. Even if a sudden correction does happen, ETH will likely recover just as quickly.
Of course, at $1,300 per token, Ethereum isn’t cheap. It should be remembered, however, that ETH has increased by over 13,000% in a relatively short period. This being the case, investing should really be seen as more of a case of now or never.
Are you investing into Ethereum? Let us know in the comments below!