"Ethereum Recognized for Its Value" VS "Overvalued Compared to Actual Usage"
DogeCoin Plummets After Musk's SNL Appearance... Experts Say "Not Surprising"
[Asia Economy Reporter Kim Suhwan] Ethereum has surpassed $4,000 for the first time in history, reaching a new all-time high. Meanwhile, Dogecoin plummeted about 35% in just three days. While Bitcoin prices remain steady, Ethereum, a representative altcoin (cryptocurrency other than Bitcoin), is beginning to be recognized for its value, though there are also critical voices claiming it is overvalued.
According to CoinDesk on the 10th (local time), Ethereum recorded an all-time high of $4,200.86 and has since been fluctuating in the $4,000 range. Ethereum surged about 90% over the past month.
Ethereum currently has a market capitalization of $483.4 billion, which is about half of Bitcoin’s market cap that exceeds $1 trillion.
Unlike Bitcoin, which has fallen about 7% over the past month, Ethereum’s sharp rise is attributed to the booming interest in virtual asset investments. Unlike Bitcoin, which is traded as a currency, Ethereum serves as a network platform where developers can use Ethereum technology to develop applications, enabling the trading of not only cryptocurrencies but virtually all forms of virtual assets.
In particular, the recent increase in trading volume of NFTs (Non-Fungible Tokens), a type of virtual asset, has contributed to Ethereum’s price surge. NFTs, a technology that grants unique ownership to digital assets such as paintings, music, and videos, have recently gained attention. Since most NFTs are developed and traded using Ethereum technology, Ethereum’s prominence has also increased.
Kevin Simpson, Chief Investment Advisor at Capital Wealth Planning, said, "NFTs are behind Ethereum’s recent upward trend," adding, "Ethereum has significant intrinsic value as a platform utilizing blockchain technology."
However, there are also views that Ethereum is overvalued. JP Morgan stated in a report sent to its clients on the 7th, "The rapid price increase without a meaningful rise in Ethereum network utilization raises doubts about Ethereum’s value." This means that despite Ethereum technology not being widely used, future expectations are excessively reflected, resulting in a price that is overvalued compared to its actual worth.
While Ethereum’s upward trend continues, Dogecoin, another recently spotlighted altcoin, is repeatedly plunging. According to CoinDesk, Dogecoin fell more than 10% from the previous day to $0.4791, marking a 35% drop within two days after hitting an all-time high of $0.7315 on the 8th.
Dogecoin was created in 2013 as a joke that started on social networking services (SNS). It was not intended as a meaningful cryptocurrency for transactions but was made purely for fun.
On the 8th (local time), Elon Musk, CEO of Tesla, appeared on the American comedy program SNL and hosted the opening. [Image source=AP Yonhap News]
Interest in Dogecoin began to rise as Elon Musk, CEO of Tesla, continuously mentioned it, attracting actual investors. Dogecoin surged more than 700% just last month.
However, right after Musk appeared on the American comedy program SNL (Saturday Night Live) on the 8th and jokingly said, "(Dogecoin) is a scam," Dogecoin began to plummet.
Bobby Ong, Chief Operating Officer (COO) of cryptocurrency media CoinGecko, said, "It is not surprising that Dogecoin plummeted just because of Musk’s SNL appearance," criticizing, "This proves that investors did not invest in Dogecoin based on any value but jumped into buying Dogecoin solely based on a celebrity’s remarks."
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