Earlier today, on October 13, the price of Ether, the native cryptocurrency of Ethereum, surpassed the $340 mark for the first time since August 31.
In August, CCN.com reported the price of Ether was moving closer to the $400 region, with upward momentum supported by optimism around the South Korean and Chinese cryptocurrency markets. But, upon the Chinese government’s nationwide ban on initial coin offerings (ICOs) and cryptocurrency trading, the price of Ether along with other cryptocurrencies such as Bitcoin, Litecoin, and Bitcoin Cash plunged.
Since then, the majority of cryptocurrencies have recovered in value. Particularly, Bitcoin and Ethereum have fully recovered from the exit of the Chinese cryptocurrency market, as the Bitcoin price achieved an all-time high at $5,920, while the price of Ether surged from around $250 to $340.
Major Factors of Ethereum Price Surge, Short-Term Price Trend
The recent surge in the price of Ether has likely been triggered by increasing developer activity around the Ethereum network and the introduction of innovative solutions such as Ethereum co-founder Vitalik Buterin’s Plasma and the Metropolis hard fork.
Through the usage of unique and practical cryptographic systems such as ZK-SNARKs, the cryptographic system employed by leading anonymous cryptocurrency Zcash, the Ethereum Foundation and the open-source Ethereum development community have developed scaling and privacy solutions to provide an improved infrastructure for developers, users, and decentralized applications.
Contrary to Bitcoin, historically, hard forks in Ethereum have had a positive impact on the price of Ether, primarily because the Ethereum open-source development community favor hard forks over soft forks to implement updates and improve its blockchain network.
As Buterin previously explained in an analytical blog post, hard forks could offer a wide range of advantages and merits in regards blockchain network updates, given that the forks are carried out in a non-contentious and secure manner.
“Soft forks are a dangerous game, and they become even more dangerous if they are contentious and miners start fighting back. Strictly expanding hard forks are also a dangerous game. Miner-activated soft forks are coercive; user-activated soft forks are less coercive, though still quite coercive because of the economic pressure, and they also have their dangers. If you really want to make a contentious change, and have decided that the high social costs of doing so are worth it, just do a clean bilateral hard fork, spend some time to add some proper replay protection, and let the market sort it out,” noted Buterin.
Since protocol updates such as Metropolis are not contentious in nature, a hard fork to execute or to implement the solution would not lead to a separate Ethereum blockchain or fork. Hence, Buterin noted a case in regards to the advantages of hard forks over soft forks can be made, if the hard forks are non-contentious and will not likely result a chain split.
Strengthening of the South Korean Ethereum Exchange Market
Briefly after the Chinese government’s ban on ICOs, the South Korean Ethereum exchange market lost a significant portion of its market share over the global Ethereum market. But, as the global cryptocurrency market restructured and trading volumes from China moved to overseas markets, the South Korean Ethereum exchange market recovered, solidifying its position as the largest Ethereum market in the world with a 32 percent market share.
It is an optimistic indicator for the long-term growth and price of Ethereum that trading volumes of Ether are moving to more regulated and stable markets like South Korea and the US.
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Last modified: March 4, 2021 5:00 PM