If there is anything that can describe cryptocurrencies this year, it was already a roller coaster ride. Wild swings both up and down were seen by the crypto market over the last months. But just last April, cryptocurrencies had a good month. Just when everyone thought that it was the end for digital currencies right after tight regulatory changes during the early part of 2018, Bitcoin is now trading higher than $9000. In addition to this, Ethereum was able to crack the $800 mark.
Entering the month below $650, Ethereum has been on a tear during the last three days. It has breached $800 on Friday right before 12:00 UTC on Bitfinex. It had a market capitalization of around $79.3 billion making it the second largest cryptocurrency today.
What Caused the Bullish Sentiment?
The bullish sentiment is mainly due to a statement raised by Reddit co-founder Alexis Ohanian who mentioned that Ethereum price will reach $1500 right before the end of the year. In fact, Nigel Green who works as CEO of deVere Group even thinks that ETH will be $2500 in 2018.
In addition to this, the entire crypto market is looking healthy after institutional investors wanted to get involved in blockchain tech. This means that traders and investors are not really concerned about the possibility of stricter rules. US regulators are planning to meet on Monday in order to discuss whether or not to consider digital currencies as securities under federal law.
One of the things that make Ethereum so good is the fact that it is the most technologically active among the other cryptocurrencies in the market. Given the issues regarding scaling, Vitalik Buterin presented sharding as their solution. So how exactly does sharding work? Sharding is a database approach wherein some transactions are settled on the side chains. After being settled in the side chains, it will then be settled again on the main chain.
Still sounds confusing? Consider the comparison of bank branches settling their accounts and sending all information to their main headquarters. OmiseGo will make use of this technology.
If you will ask Buterin, shards are high-capacity chains that communicate with the main chain. It is also going to be governed by certain rules. This will ensure the accuracy of the entire distributed ledger. How exactly does this benefit Ethereum? If the Ethereum blockchain is going to produce one block every minute, side chains will be producing blocks every few seconds. This would result in a faster transaction time.
A 90% Jump in a Month
Considering that Ethereum has been able to jump to $800, it only means that the cryptocurrency was able to spike by more than 90% in just one month. With bullish forecast, it could mean that Ethereum could easily double its value in the near future.
Though there have been plenty of wild swings in the crypto market, it seems that Ethereum has been able to withstand all of it so far. Though no one actually knows for sure if it is ever going to hit $1500 or if it will have an even higher price this year, however, one of the things that you can guarantee is a lot of wild upside and downside swings within the crypto market.