Cryptocurrencies are soaring this year. Already, Bitcoin is up 98% to just over $57,000 as of the end of the day on Monday. That compares to a 30% gain by the S&P 500 Index during the same span.
But Bitcoin’s big gain isn’t even close to the top return that can be found in the crypto world. In fact, the second-largest crypto is growing much faster. So far in 2021, Ethereum is up a staggering 434% to just over $4,000, according to Coindesk data.
That four-times-higher growth also means that the No. 2 crypto (Ethereum) is making ground on No. 1 crypto (Bitcoin). As of the end of the day Monday, the market capitalization of Bitcoin—the combined value of all its digital coins—stands at $1.1 trillion. That’s compared to Ethereum’s nearly $500 billion market capitalization.
Why is Ethereum gaining ground on Bitcoin? Some investors, such as Mark Cuban, are calling attention to Ethereum for its ability to process more transactions per second than Bitcoin. In the digital world, speed wins.
Then again, the gains of both Bitcoin and Ethereum pale in comparison to that of Dogecoin, which is up over 10,000% this year. That has made Dogecoin the third-largest crypto, with a market cap of $64 billion.
But can this 2021 run on crypto be sustained? Daniel Ives, managing director of equity research at Wedbush Securities, tells Fortune that there is “clearly some froth” in some crypto prices; however, he foresees the run continuing.
“We believe the crypto boom is still in the early innings of playing out for the next decade,” Ives told Fortune. “While regulatory goal posts need to put in place, we believe the use cases for crypto and transactions throughout the crypto universe are just starting to play out. From a pure demand perspective, we see crypto prices going higher, led by Bitcoin.”
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