Ether has climbed 5,700 percent since January, with Ethereum's market cap surging from $700 million to $45 billion. The token is the year's best performer among major cryptocurrencies. Mike Novogratz
Ether has climbed 5,700 percent since January, with Ethereum's market cap surging from $700 million to $45 billion. The token is the year's best performer among major cryptocurrencies.
Mike Novogratz, a hedge fund billionaire and former Fortress executive, believes the momentum continues into year's end. "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," he said.
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Initial coin offerings have fueled much of the surge. The ICO market is on track to raise $3 billion by year-end, with projects having secured $2.8 billion in the first eleven months.
But there's another driver: Ethereum's developers have shipped serious improvements to the network itself. The Byzantium hard fork folded in Zcash's ZK-SNARKs technology, opening a path toward private transactions. Commercial dapps can't settle anonymous transactions on Ethereum, though the development community has tested confidential ZK-SNARKs transactions on the testnet.
Developer activity predicts price. JP Vergne, a researcher at Ivey Business School, released findings in July showing that developer work on a blockchain predicts a cryptocurrency's exchange rate. "We found that the best predictor of a cryptocurrency's exchange rate is the amount of developer activity around it," Vergne said in his study "Buzz Factor or Innovation Potential: What Explains Cryptocurrencies' Returns?".
The pattern holds for Ether. EtherDelta and CryptoCribs, two decentralized applications built on Ethereum, are gaining commercial traction and starting to compete against established, centralized platforms.
Fred Ehrsam, Coinbase co-founder, sees decentralized exchanges as critical to Ethereum's future. "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," he wrote.
Dapp growth and developer contributions to the protocol drive the long-term rise in Ether's price and market value.
MiningPool content is intended for information and educational purposes only and does not constitute financial, investment, or legal advice.
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