Ethereum, the world’s largest cryptocurrency platform, surpassed Bank of America and Wells Fargo in market cap on Monday, reaching a total valuation of $403 billion.
As of publication time, ETH/USD trades above $3,430 with a market capitalisation of $397 billion (down from $403 billion in 24 hours) per data from Coingecko. In comparison, data from the New York Stock Exchange shows that Bank of America currently has a market cap of $347 billion and Wells Fargo has a market cap of $188 billion.
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The news of Ether passing two major banks in market value comes after the cryptocurrency soared to new all time highs on Monday ($3,463) – prices which were shortly surpassed on Tuesday as prices tickled $3,500 during late morning trading hours (UTC+2).
Briefly, Ethereum is not comparable to bitcoin, and is often described as ‘digital oil’ due to the plethora of applications built on top of it. All applications in the ethereum ecosystem require ‘gas’ to function – the native transfer mechanism of the Ethereum blockchain.
ETH & BTC transaction activity speak to seemingly distinct use-cases
In fact, activity on the Ethereum blockchain is far more pronounced in comparison to the bitcoin network per data from Glassnode. Notably this is due to the difference in use-cases for the blockchains: bitcoin is digital gold and a hedge against inflation and ethereum is digital oil which is more useful to run economic activity.
European Investment Bank interested in Ethereum
Just last week, the European Investment Bank (EIB) announced that it issued 100 million euros in two-year bonds using the Ethereum blockchain.
“On 27 April 2021, the EIB launched a digital bond issuance on a blockchain platform, deploying this distributed ledger technology for the registration and settlement of digital bonds, in collaboration with Goldman Sachs, Santander and Societe Generale,” the EIB wrote in a statement. “The EIB believes that the digitalisation of capital markets may bring benefits to market participants in the coming years, including a reduction of intermediaries and fixed costs, better market transparency through an increased capacity to see trading flows and identity asset owners, as well as a much faster settlement speed.”
This rhetoric is in line with sentiment from the European Central Bank’s Christine La Garde, who has repeatedly indicated that a ‘digital euro’ is coming. However, the ECB is not alone in this endeavour, as all central bankers have announced pilot projects for the eventual roll-out of Central Bank Digital Currencies (CBDCs).
Being the largest platform for decentralised applications, it follows that the Ethereum blockchain is the probable platform of choice for these projects. However, one should not confuse the decentralised platform with applications built on top of it – which are by no means automatically decentralised by virtue of being built on the platform.
Meanwhile, Bitcoin trades at $56,000 at the time of writing – down several percentage points on the day as miners continue to accumulate newly minted coins.
At a $1.056 trillion market cap, the bitcoin network is worth more than Facebook, valued at $916 billion according to data from the NYSE.
Read More: The investment case for Bitcoin in 2021
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