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Crypto: Ethereum outpaces bitcoin amid NFT boom and metaverse projects

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Yahoo Finance’s Jennifer Schonberger breaks down crypto reports as ethereum is on the rise and bitcoin underperforms.

Video transcript

BRIAN SOZZI: All right, as we mentioned at the top of the show, we're seeing really strong rallies here behind Bitcoin and even Ethereum. Let's bring in Yahoo Finance's crypto reporter, Jennifer Schonberger, to break down some of these moves. Jen.

JENNIFER SCHONBERGER: Good morning, Brian. Yeah, Ethereum outpacing Bitcoin by the widest margin this year since the inception of the Ethereum network. Take a look at a chart of Bitcoin versus Ethereum. Both tokens down, of course, from those record highs that we saw back on November 10th. But if you look at the performance over the past year, going back to December 2020, Ethereum has gained a whopping 530% over that time, while Bitcoin soared nearly 100%. So a large margin there, but definitely nothing to sniff at as far as those returns.

But Bitcoin still reigns as the largest cryptocurrency measured by market capitalization. It's sitting at over $1 trillion right now. Ethereum about half of that, at $560 billion in terms of market cap. But Ethereum is gaining market share. Bitcoin's overall share of the entire digital asset ecosystem has been cut in half from earlier this year to less than 42%, according to Valkyrie Funds, while Ethereum has nearly doubled to more than 21%. So that can account perhaps for some of the price move that we've seen.

Ethereum has been gaining ground as it's being used by thousands of new decentralized applications. The majority of projects are being built on the Ethereum blockchain as we look forward, which lends Ethereum to massive adoption as those projects come online. NFTs, as you know, are hot, hot, hot. And many of those NFTs are built on the Ethereum blockchain. And that's only expected to grow from here.

Leah Wald, CEO of the Valkyrie Funds, tells me, quote, "Ethereum has outperformed Bitcoin this year because there's simply more happening on the Ethereum blockchain than anywhere else. Between DeFi increasingly eating TradeFi's lunch, NFTs continuing to soar higher, and projects geared towards building whatever the Metaverse will ultimately be, it's no wonder Ethereum is up." And as for where we go from here, market strategists have been telling me that we are looking at a bullish uptrend here. And it wouldn't be out of the question for either Ethereum or Bitcoin to make a new high before the end of the year.

Separately, Brian, I just want to turn to some comments that SEC chair Gary Gensler just made in a digital assets forum speaking in New York this morning. He says that we still don't have sufficient investor protection for the crypto space. He says that these new technologies will not persist if we don't have the proper controls in place and that the public will lose trust if we don't have those. He implored the so-called gatekeepers, which he calls accountants and lawyers who are working on crypto projects, to bring those in and register with the SEC. He also said that trading platforms should register with the SEC. And there's no question that for stablecoins, there should be a one-to-one backing, and there should be great transparency for those reserves. Brian.

BRIAN SOZZI: All right, thanks for bringing that to us. Jennifer Schonberger, appreciate it.

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