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Aug 04, 2017 02:32 AM IST | Source: Moneycontrol.com

Rise of the underdog: Ether’s 900% rally this year blunts some of bitcoin’s edge

The price of ether -- the fuel that operates the distributed application platform Ethereum -- peaked at USD 83 and now is faring at levels of USD 80 on the CoinDesk price index.

BySidhartha Shukla
Rise of the underdog: Ether’s 900% rally this year blunts some of bitcoin’s edge

Overshadowed by bitcoin, ether had a long spell of trading in a flat range, but that has now changed and the altcoin - alternative cryptocurrency launched after the success of Bitcoin -- has rallied around 900 percent year-to-date (YTD).

The price of ether -- the fuel that operates the distributed application platform Ethereum -- peaked at USD 83 and now is faring at levels of USD 80 on the CoinDesk price index.

As per Coinmarketcap, ether at present has the second largest market cap only after bitcoin. Since it began trading in 2015, ether has appreciated over 2,800 percent.

ether

Experts have offered various explanations for this rally. While some opine that it is due to the overall acceptance of digital currencies across the globe others say that ether started to rise from the start of the year due to tailwinds faced by bitcoin.

In January the Central Bank of China had cracked down on the nation's bitcoin exchanges and the US SEC's rejection of the Winklevoss bitcoin exchange traded fund (ETF) was a double whammy for the world's first digital currency.

Infographic(8)

With gradual rise in awareness about virtual currencies and blockchain technology, altcoins (alternate digital currencies to bitcoin) are steadily gaining market share and are soon might have 50 percent market cap. Since the start of the year when bitcoin’s market dominance was 87 percent, it has now dropped to 60 percent, as per Coinmarketcap.

If the rise in ether's price continues or even if it steadies at these levels, it will outrun bitcoins as the top performing currency for 2017. Since the start of the year bitcoin has appreciated around 50 percent and is trading at an all-time high of USD 1,500.

Indian Scene

In India, the government has set up an inter-disciplinary committee chaired by the special secretary (Economic Affairs) to examine the existing framework with regard to virtual currencies.

Currently, none of the major exchanges in India like Zebpay, Unocoin and Coinsecure provide an option to buy or sell ether or any other virtual currency, expect for bitcoin.

After the government's review, if virtual currencies are not deemed illegal in India and a feasible set of rules are laid down for their use then along with ether many other cryptocurrencies like ripple or litecoin could soon be listed on Indian exchange platforms.

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