“One of its more important features is that you don’t have identities tied to this,” said Spencer Bogart, head of research at venture firm Blockchain Capital. “This financial privacy is an important characteristic.”

Ether, the second-most-popular cryptocurrency after bitcoin, is used to pay for applications or programs that run on the Ethereum blockchain, a secured list of transactions that can be shared. That allows for the use of “smart contracts,” or pieces of computer code that make the terms of such agreements operate automatically. The blockchain has the potential to reshape business and finance by enabling immediate settlements of activities such as bank transfers and securities trades.

JPMorgan Chase & Co., BP Plc, Microsoft Corp. and ING Groep NV are among those experimenting with it. The current value of all the ether held, $23 billion, means dozens of electronic wallets have accrued nine-figure positions. Many of them could be held by individuals, according to a Bloomberg analysis. Individuals can hold multiple wallets.

Eoin Treacy's view

Interest in cryptocurrencies has surged this year with stories, such as this one, of riches made almost overnight attracting legions of private investors into the market. The immutability of bitcoin and the anonymity of holding its, the ability to transfer currency across borders without government interference and the fact supply is limited are all aspects of the market which appeal to investors. However, it is the smart contracts aspect of the cryptocurrency market that represents where it can grow and which lends it utilitarian value. 

This story over the weekend quoting representatives from Ripple (the third most traded cryptocurrency) on how blockchain in its purest form is too slow for big banks and its public ledger would inform competitors of what a bank is doing. Here is a section: 

“But Marcus Treacher, the global head of strategic accounts at Ripple, said the fact that each user of a blockchain has a record of every transaction conducted would not work for banks competing with one another. He said: "Every single bank gets a copy of everything, even when it’s encrypted. That is not going to work."

I find it interesting that Bitcoin prices stopped going up when the Chinese central bank moved into the support the Renminbi in a more robust manner from early June. Chinese investors had been using bitcoin to flee the depreciating Yuan for much of the last year but that trade has ebbed with stronger measures to steady it. 

Bitcoin hit a medium-term peak near $3000 on June 16th and has been ranging in a volatile manner since. A break in the almost month-long progression of lower rally highs will be required to signal a return to demand dominance. 

Ethereum has a market cap about half of bitcoin’s but trades almost the same volume on a daily basis which means it is considerably more volatile. It’s no exaggeration to state Ethereum is high beta bitcoin and peaked a couple of days ahead of bitcoin in June. Ethereum continues to trend lower and is now almost half its peak value. A key difference between the two is that Ethereum’s supply is not strictly limited since it is designed to scale with the market for smart contracts.


Demand for graphics cards for Ethereum mining have lend a tailwind for shares like Nvidia and Advanced Micro Devices.