NEW YORK–Bitcoin is the best-known of the crypto-currencies, even if remains a bit of a mystery to many in credit unions, and its price has hit record highs in 2017, including more than doubling in price since the start of the year. But Bitcoin is also on the verge of being knocked off as the dominant virtual currency globally.
Instead, it’s another crypto-currency, Ether, which lives in an upstart network known as Ethereum, that has skyrocketed 4,500% in value since Jan. 1, noted the New York Times. That means the outstanding units of the Ether currency were worth around $34 billion as of earlier this week — or 82% as much as all the Bitcoin in existence. At the beginning of the year, Ether was only about 5% as valuable as Bitcoin.
What all that shows, the Times reported in its analysis, is “how volatile the bewildering world of virtual currency remains, where lines of computer code can be spun into billions of dollars in a matter of months.”
Bitcoin has also hit highs in values this year, reaching $2,600 as of June 18, but it has also struggled with technical issues and “bitter internal divisions” among its biggest supporters, according to the Times. Another problem for Bitcoin has to do with its image, as it is often associated with online drug sales and ransomware hackers.
Both tech companies such as Microsoft and big banks such as JPMorgan Chase have gotten behind Ethereum’s goal of providing not only a digital currency but also a new type of global computing network, which generally requires Ether to use, according to the Times.
“If recent trends continue, the value of Ethereum’s virtual currency could race past Bitcoin’s in the coming weeks,” the Times stated. “Virtual currency fanatics are monitoring the value of each and waiting for the two currencies to switch place, a moment that has been called ‘the flippening’.”
Virtual currencies continue to be more than just a sideshow presence. The Times reported that the combined value of all Ether and Bitcoin is now worth more than the market value of PayPal and is approaching the size of Goldman Sachs.
Despite the optimism, analysts told the New York Times that many expect that Ethereum, launched in 2015 by college dropout Vitalik Buterin in Canada, will also see a large value correction at some point in the future.
Because the virtual currencies are tracked and maintained by a network of computers, no government or company is in charge. The prices of both Bitcoin and Ether are established on private exchanges, where people can sell the tokens they own at the going market price, the Times reminded.