Ethereum could overtake bitcoin as world number one cryptocurrency, analysts say

The price of ether, Bitcoin’s biggest competitor, rose on Thursday after the Ethereum core network was upgraded.

Ether was trading 6.2 percent higher at $2,781 at 2:43 p.m. in London, according to Coindesk data. The second-largest cryptocurrency by market capitalization has risen from $741.12 since the beginning of the year for a gain of about 280 percent, while bitcoin is up about 40 percent in the same period.

The market capitalization of ether was $324.4 billion, while bitcoin is $765.5 billion.

“Ethereum could flip bitcoin as the world’s number one cryptocurrency,” Tim Sabanov, the chief technology officer at Scotland-based bitcoin and crypto platform Zumo, told Forbes.

The apparent success of the upgrade is getting priced in, said Martin Gaspar, research analyst at CrossTower. “The notion of ethereum becoming a deflationary cryptocurrency in the future is now tangible, and the effects on ethereum’s valuation could be profound.”

It will take a while, possibly even weeks, to see any real impact from the upgrade, according to Nansen Blockchain platform Co-Founder and CEO, Alex Svanevik.

“Overall, the reaction is more or less as expected. It is very rare that ethereum benefits from any immediate upside following such network upgrades, although a bias tends to materialize over time,” head of research at Synergia Capital, Denis Vinokourov said.