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ETH · 6w

Ethereum outshines Bitcoin in cryptocurrency horse race, price may have further to run

Ethereum (ETH-USD) is defying broad underperformance in cryptocurrencies, with its recent price gains reflecting a surge of interest in smart contract platforms that are being rapidly co-opted by the nonfungible token (NFT) boom. 

Amid newfound investor interest, the digital coin's performance has even eclipsed Bitcoin’s (BTC-USD), which has languished for over a month after setting a new record high near $68,000.

Currently trading around $4,400, Ethereum is the second largest cryptocurrency by market capitalization. Like Bitcoin, ETH has morphed into something of a reserve currency of its own for crypto investors. That also might mean headwinds for the asset over the longer term, not to mention an opportunity for competing blockchains.

Unlike BTC, which is most often used as speculative store of value like gold, ether's primary use is to provide fuel or gas for transactions across the Ethereum blockchain.

“As the price has gone up, it's gotten very expensive to get any [transaction] space on a block on the Ethereum blockchain,” Aaron Lammer, a decentralized finance (DeFi) specialist at the crypto-focused quantitative hedge fund, Radkl, told Yahoo Finance. 

“There's still a huge number of people waiting to be on-ramped into DeFi and NFTs, we might see the price of Ether go even higher, and really only become available to people who are using it in a large-scale institutional way,” Lammer added.

As Lammer explained, one consequence of high fees is that projects and users have a financial incentive to drop Ethereum for less expensive smart contract-enabled blockchain alternatives such as Solana, Avalanche and Terra.

By no coincidence, the tokens for these competing chains behind smaller digital coins like Terra (LUNA1-USD), Avalanche (AVAX-USD) and Solana (SOL1-USD) have also performed well over the last month.

Terra token has doubled in the last week, surpassing Shiba Inu coin (SHIB-USD) as the 12th largest ...

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