The cryptocurrency "Ether," Bitcoin's biggest competitor, has soared once again following the upgrade of its core network, Ethereum, which indicates a restriction in the supply of the cryptocurrency and makes it more scarce. The second largest cryptocurrency by market capitalization reached its highest level in two months this week, pushing Ether's gains for this year to about 280%, compared to Bitcoin's 40% increase during the same period after it fell from a nearly record level of $65,000 in April. The major Ethereum upgrade was launched earlier this Thursday, helping to achieve a record gain for Ether's price of 20% over the past week and bringing Bitcoin back to levels around $40,000. The rise in Ether's price to nearly $3,000 lifted the total market value of cryptocurrencies to approximately $1.7 trillion, up from recent lows of $1.2 trillion recorded in July. As Ethereum's rise accelerates, some in the cryptocurrency sector expect it to surpass Bitcoin and claim the title of the leading cryptocurrency by value. Tim Sabanov, CTO of the Scotland-based Bitcoin and cryptocurrency platform Zumo, stated in comments to Forbes magazine: "Ether could dethrone Bitcoin as the world's leading cryptocurrency."
### Blockchain Improvements
The Ethereum network upgrade aims to improve blockchain technology and make rising transaction fees more manageable. The upgrade, known as Ethereum 2.0, is part of a long-awaited shift for the Ethereum network away from the energy-intensive working model used by Bitcoin for mining, which creates new units by solving mathematical equations. The complete upgrade is not expected to be realized until 2022. Sabanov added: "What Ethereum has done is look at something that already exists—Bitcoin—and make it better… It has a very vibrant developer community, which means the ecosystem is growing at an astonishing rate." Ethereum bulls point out that the network has recently surpassed Bitcoin in several closely monitored metrics and price performance over the past year. Ether's price has increased by 600% over the past twelve months, compared to a 250% increase for Bitcoin. Sabanov also noted: "The crypto giant has recently surpassed Bitcoin in the total number of daily active addresses, and this momentum shows no signs of slowing down as the network continues to drive major DeFi and NFT trends."
### A Multi-Billion Dollar Market
Decentralized finance (DeFi), using cryptocurrency technology as an alternative to traditional financial products like loans and insurance without the need for banks, alongside non-fungible tokens (NFTs), has become a multi-billion dollar market over the past two years. Nearly all DeFi and NFT funds currently rely on trading via the Ethereum network's blockchain. The Ethereum upgrade will also see the destruction of some Ether tokens, or "burning" them, limiting new tokens coming into the market and, theoretically, making the tokens more scarce. Earlier this week, Dan Morehead, founder of the $2.8 billion cryptocurrency-focused investment fund Pantera Capital, reportedly predicted that Ethereum would eventually turn the tables on Bitcoin, despite forecasts that Bitcoin's price could reach $700,000 per unit within just ten years. Morehead told the Reuters Global Markets Forum on Monday: "You will see a shift of people wanting to store wealth, and they’re doing that in Ether instead of just Bitcoin." Meanwhile, the network's founder, Vitalik Buterin, confirmed that the software upgrade also shows that the Ethereum network is well-positioned to make further changes that will significantly reduce its energy use. Many in the cryptocurrency field have expressed their support for the Ethereum upgrade, claiming it would be broadly beneficial for the cryptocurrency market. Diogo Monica, co-founder and president of cryptocurrency bank Anchorage Digital, told Forbes magazine: "For many cryptocurrencies and the DeFi applications tied to them, this is a significant boost to improve efficiency, which is very good for the overall crypto ecosystem."
