While bitcoin has captured the limelight in the past few weeks as it surged to a new record high, another major cryptocurrency, ether, has been enjoying its own meteoric rise.
Launched in 2015, ether, also known as ethereum, is by far the second-largest digital currency in terms of total value, now estimated at more than US$460 billion.
Along with other cryptocurrencies including Solana and Dogecoin, it benefited from the regulatory approval in the US of a new bitcoin investment product, the exchange traded fund (ETF) in mid-January, CoinShares International Ltd research head James Butterfill said.
Photo: Bloomberg
These ETFs allow investors to profit from any change to the price of cryptocurrencies without having to buy them directly, while also letting them sell at any time.
The launch of crypto ETFs has led to an influx of new money, sending bitcoin to a fresh record on Friday of US$70,085.
Bitcoin’s rise has been well-documented, but ether’s has been even more impressive, surging almost 72 percent year to date in comparison with bitcoin’s 61 percent rise.
This strong performance is largely due to “expectations that an ethereum ETF could be approved in the United States,” Kaiko senior analyst Dessislava Aubert said.
Several asset management companies have applied for authorization from the US financial markets regulator, the Securities and Exchange Commission (SEC), to market these ether investment products.
The SEC must rule on the first such applications, from VanEck and Ark 21Shares, by May 23 at the latest.
“Ethereum has started to wake up as investors are anticipating a potential approval,” crypto consultancy MN Trading founder Michael van de Poppe said, adding that “people are rotating from bitcoin to ethereum as a potential investment opportunity.”
Beyond the ETF effect, the digital currency dreamed up by Russian programmer Vitaly Buterin has several other cards up its sleeve.
For cryptocurrency exchange eToro analyst Simon Peters, ethereum is also buoyed by the prospect of “Dencun,” a major upgrade to the technology underlying this digital currency, scheduled for March 13.
This major change would improve transaction processing capacity and cut transaction costs, but also has the potential to unleash the growth of an ecosystem with multiple applications.
“Bitcoin’s primary use is as store of value, while ethereum has much more potential use cases,” Peters said.
For example, it is the destination of choice for non-fungible tokens (NFTs) — the certificates of digital authenticity that caused such a stir three years ago.
The two cryptocurrencies are not in direct competition, because bitcoin is “hard money,” while ether “is basically an investment for the entire blockchain and smart contract ecosystem,” Van de Poppe said.
Ethereum has already successfully negotiated two major technical transformations in the past few years, including the switch to a less energy-intensive system in September 2022.
James Butterfill said there is “increasing optimism” that a “Dencun” upgrade would “go without a hitch,” which would reinforce the currency’s credibility.
He added that ether, by the very nature of its operation, offers the “added benefit” of interest generated by its holders.
The mechanism for creating this currency involves owners putting up existing ether coins as collateral in a process known as “Proof of Stake,” which differs from bitcoin’s energy-intensive method involving highly complex calculations, known as “Proof of Work.”
Ether investors who agree to put up some or all of their holdings receive a fee of a few percent a year, in addition to any potential capital gain if the currency appreciates in value.
The “Proof of Stake” process adopted in September 2022 has significantly increased the amount of ether used as collateral, Peters said, currently at 21 percent compared with just 10 percent 18 months ago.
“There is less ethereum in circulation,” he said, adding: “If demand increases, given the squeeze in supply, then price should follow.”
“I think that ethereum is going to be outperforming bitcoin,” Van de Poppe said, adding that the total market capitalization of ethereum could end up exceeding that of bitcoin.
ASML Holding NV’s new advanced chip machines have a daunting price tag, said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), one of the Dutch company’s biggest clients. “The cost is very high,” TSMC senior vice president Kevin Zhang (張曉強) said at a technology symposium in Amsterdam on Tuesday, referring to ASML’s latest system known as high-NA extreme ultraviolet (EUV). “I like the high-NA EUV’s capability, but I don’t like the sticker price,” Zhang said. ASML’s new chip machine can imprint semiconductors with lines that are just 8 nanometers thick — 1.7 times smaller than the previous generation. The machines cost 350 million euros (US$378 million)
Apple Inc has closed in on an agreement with OpenAI to use the start-up’s technology on the iPhone, part of a broader push to bring artificial intelligence (AI) features to its devices, people familiar with the matter said. The two sides have been finalizing terms for a pact to use ChatGPT features in Apple’s iOS 18, the next iPhone operating system, said the people, who asked not to be identified because the situation is private. Apple also has held talks with Alphabet Inc’s Google about licensing its Gemini chatbot. Those discussions have not led to an agreement, but are ongoing. An OpenAI
INSATIABLE: Almost all AI innovators are working with the chipmaker to address the rapidly growing AI-related demand for energy-efficient computing power, the CEO said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported about 60 percent annual growth in revenue for last month, benefiting from rapidly growing demand for artificial intelligence (AI) and high-performance computing applications. Revenue last month expanded to NT$236.02 billion (US$7.28 billion), compared with NT$147.9 billion in April last year, the second-highest level in company history, TSMC said in a statement. On a monthly basis, revenue surged 20.9 percent, from NT$195.21 billion in March. As AI-related applications continue to show strong growth, TSMC expects revenue to expand about 27.6 percent year-on-year during the current quarter to between US$19.6 billion and US$20.4 billion. That would
‘FULL SUPPORT’: Kumamoto Governor Takashi Kimura said he hopes more companies would settle in the prefecture to create an area similar to Taiwan’s Hsinchu Science Park The newly elected governor of Japan’s Kumamoto Prefecture said he is ready to ensure wide-ranging support to woo Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to build its third Japanese chip factory there. Concerns of groundwater shortages when TSMC’s two plants begin operations in the prefecture’s Kikuyo have spurred discussions about the possibility of tapping unused dam water, Kumamoto Governor Takashi Kimura said in an interview on Saturday. While Kimura said talks about a third plant have yet to occur, Bloomberg had reported TSMC is already considering its third Japanese fab — also in Kumamoto — which would make more advanced chips. “We are