Although Bitcoin is the asset behind the democratization and adoption of cryptos, since then, many other projects come to play elbows with the crypto-queen. Like Ethereum created in 2015 by the young Russian-Canadian developer Vitalik Buterin. Here we will only focus on the evolution of the platform's transactions as well as the asset's price but not its technology and ambitions, which will be mentioned in a future article. Let's focus on the second most valuable cryptocurrency in terms of market valuation.

From a transactional standpoint, in just over two years of existence, Bitcoin has seen its direct competitor catch up and then far outpace it. Let's take a closer look at the numbers with the chart below:

 

In 2017, the two cryptocurrencies were neck and neck with a small lead for Ethereum. But after that, there was a huge acceleration, with an increase of 7000% for transactions at ETH going from 17,000 transactions to 1,200,000, against only 3% for BTC, going from 224,000 to 232,000 transactions within five years. By way of comparison, Litecoin falls between the two, with a 3000% increase in transactions over the same period but with a lower number of transactions than Bitcoin and far behind Ethereum. Did this increase in transactions have a direct impact on the price of both assets? Nothing better than a chart:

 

Price evolution of ether and bitcoin (January 2017 - September 2018).

Source: ProRealTime

We see a significantly stronger price progression for the second largest cryptocurrency on the market. If we calculate from January 2017 until September 2021, the price increase of the ether is more than 28,000% against "only" 4,500% for Bitcoin. Looking at these figures, we can deduce that the exponential use of Ethereum in terms of transactions has indeed had an accelerating effect on the ether (the token used on the platform) prices. In order to transact on Ethereum, it is necessary to exchange ether, so we can deduce the positive correlation between the number of transactions on the platform and the increase in prices.

Many experts believe that the cryptocurrency should gradually catch up with the current leader within the next few years in terms of market capitalization. Currently Bitcoin remains the leader in terms of valuation. As a reminder, Bitcoin's market capitalization hovers around $800 billion versus Ethereum's $350 billion. The two cryptocurrencies alone account for more than $1.1 trillion of a total market capitalization of more than $1.6 trillion. They weigh in at over 68% of the total market.

This strong acceleration in the number of transactions has led to a congestion of the Ethereum blockchain, generating a rise in transaction costs and long execution times. The crypto community is eagerly awaiting the transition from Ethereum to Ethereum 2.0, which on paper will solve these scalability issues. In parallel, other blockchains are developing and compete with the one created by Vitalik Buterin, such as Solana or Cardano.