Although in recent years the queen of cryptocurrencies continues to be Bitcoin, whose market capitalization alone exceeds that of all other cryptocurrencies (more than 4000), the movements around what is considered the second cryptocurrency (Ethereum) are opening some very interesting debates, and in some cases very optimistic about where the price of this digital asset is going to evolve.
Ethereum, with its Ether token, is considered for all intents and purposes as the second most important cryptocurrency on the market.
What is Ethereum and why is the value of Ether growing
To understand how Ethereum works and what it represents, and because its digital asset generates so much optimism, it is important to understand what it represents in the markets and, above all, what it is representing from a practical point of view vis-à-vis digital assets.
Ethereum is one of (blockchain) that allows and supports the creation of third-party tokens, as well as the creation of so-called smart contracts. This has meant that a large part of the digital assets on the market are supported under the protection of Ethereum which, in colloquial language, becomes something like a network of networks.
The use of Ethereum, which is actively and notably taking part in the development and sale of, for example, art collectibles through the network, has multiplied the value of the network’s digital asset, which has grown in 12 months nothing. less than 1500%, and that it recently touched one of its all-time highs exceeding $3,455. It must be taken into account that the profitability it has been offering during 2021 exceeds 350%. It is, obviously, a return within the reach of very few assets, if not none.
The growth of profitability, and the projection of Ethereum, on which operations, new assets and projects grow day by day, makes the predictions increasingly optimistic. These predictions, in some cases supported by technical indicators, according to some analysts could give indications that the asset’s ceiling could even break $10,000. A figure that seems distant, but that according to some technicians is not so difficult to reach.
But is it really that easy to achieve those goals?
No. The answer is that not only is it not easy, but we run the risk of experiencing a wave of false optimism around an asset that may well not respond to these expectations which, in addition, in many cases are generated outside of the environment. specialized in cryptocurrencies.
In fact, both in technical analysis and in specialized cryptocurrency environments, it is openly spoken that the rebound in, for example, relative strength has risen very steeply to the highs of January, this can be interpreted as a too rapid growth, which is usually the prelude to a readjustment, perfectly abrupt.