The Ethereum (CRYPTO: ETH) price is gaining at the time of writing, up 3% over the past 24 hours.
One Ether is currently worth US$2,009 (AU$2,679).
It’s been another wild day for the Ethereum price, with some huge hourly price swings.
To give you an idea, Ether was trading as high as US$2,020 over the past 24 hours and as low as US$1,701. That’s a 19% variance just since this time yesterday.
The world’s number 2 crypto currently has a market cap of US$232.4 billion.
Why China’s crypto crackdown could be for the best
Although the Ethereum price is up over the past 24 hours, it remains down 21% over the past 7 days. Last Wednesday, 16 June, Ether was trading for US$2,536. And it was only on 12 May that Ether hit an all-time high of US$4,383.
Like Bitcoin (CRYPTO: BTC), the Ethereum price has come under renewed pressure from the Chinese government. China is cracking down on crypto mining as well as crypto transactions among Chinese financial institutions. (You can get the full scoop here.)
While that’s seen both Bitcoin and Ether fall, Simon Peters, market analyst for online trading platform eToro, believes China’s suppression may turn out for the best…eventually.
According to Peters:
Whilst short term uncertainty off the back of the latest news is driving the sell-off, in the long-term this market transition could be very beneficial to bitcoin and crypto more broadly. Decentralising crypto mining and ending Chinese dominance when it comes to mining could help other more crypto-friendly countries become leaders in the space.
New mining operations – or existing operations moving out of China – could now look towards renewable energy sources to enable clean operations. Over time, this could decrease the amount of fossil fuel energy used for global bitcoin mining.
Cryptos’ immense carbon footprint (global Bitcoin mining uses more energy than the entire Netherlands) has drawn the ire of environmentalists, regulators, and, perhaps most famously, Tesla Inc (NASDAQ: TSLA) boss Elon Musk.
Musk recently stated that Tesla wouldn’t sell its Bitcoin holdings, but it wouldn’t accept Bitcoin anymore until the token’s carbon emissions issues are cleared up.
How the Ethereum price moves compare to Bitcoin
Before we look at how the Ethereum price has moved this year compared to Bitcoin, a quick summary for the uninitiated on what Ether really is.
I recently heard the Ethereum network referred to as creative computation.
What does that mean?
CoinDesk sums it up well:
Ether is the cryptocurrency built on top of the open source Ethereum blockchain, which runs smart contracts. The cryptocurrency acts as a fuel that allows smart contracts to run unlike bitcoin, which is meant to be a unit of currency on a peer-to-peer payment network.
With that out of the way, the Ethereum price has widely outperformed Bitcoin year-to-date. Ether has gained 170% so far in 2021 while Bitcoin is up 16%.
Ether has also outperformed Bitcoin over the past 12 months. The Ethereum price has gained 727% since 23 June 2020 compared to a gain of 254% for Bitcoin.