Ethereum, the second most valuable cryptocurrency after bitcoin, has almost doubled in value so far this year—and the number of active ethereum addresses is growing at nearly twice the rate of bitcoin’s.
Ethereum’s active address count has increased by 118% since the beginning of the year, data from blockchain analytics firm Messari, first reported by crypto news site Decrypt, has shown.
Meanwhile, bitcoin’s active address count has increased by just 49%.
“The level of development on ethereum is crazy: initial coin offerings, stablecoins, non-fungible tokens, decentralized exchanges and other decentralized finance applications, Web 3 use cases,” Messari chief executive Ryan Selkis said via email, though he added bitcoin remains “the industry’s dominant asset and most important project.”
The ethereum price has also surged this year, with ethereum’s tradable token ether now trading at around $240—up almost 90% from $130 at the start of January. Bitcoin, on the other hand, has seen its post-coronavirus crash rally halted in its tracks since May with bitcoin repeatedly trying and failing to break the psychological $10,000 per bitcoin level.
Despite the excitement swirling around ethereum, recent setbacks, including a warning that ethereum 2.0 may be delayed again, is leaving the door open for competitors.
“There’s a lot of demand for smart contract platforms that scale, so there’s a big opening in the market right now with ethereum 2.0 delayed, [processing] prices high, and well-funded competitors launching imminently,” Selkis said.
One such cryptocurrency, chainlink, has been boosted by a surge of interest in decentralized finance, sometimes known as DeFi—the idea that blockchain entrepreneurs can use bitcoin and crypto technology to recreate traditional financial instruments such as loans and insurance.
The chainlink price is up by around 1,000% on the last year, hitting fresh all-time highs over the last few days.
However, some cryptocurrency and ethereum developers have cautioned against investors viewing blockchains and cryptocurrency tokens as in competition.
“Viewing other blockchains as competitors to ethereum isn’t the right framework to view the crypto space,” Kosala Hemachandra, founder and chief executive of MyEtherWallet, who’s been developing on ethereum since its 2015 launch, said via email, adding delays to ethereum 2.0 “aren’t stopping or slowing the many projects building on ethereum.”
DeFi has been found to be one of the biggest drivers of ethereum growth in recent months, with DeFi applications accounting for over 97% of all decentralized app volume on ethereum according to a July report from Dapp.com.
“Different blockchains have separate goals and purposes,” Hemachandra said.
“Some are primarily focused on value transactions while others support decentralized app development, for example. You have to look beyond market cap to really evaluate blockchain development.”