Why Ethereum Keeps Going Up ... But Will It Continue?

I first bought the cryptocurrency Ethereum (Ether) in early 2016 just before the much hyped crowdsale of “The DAO”, a token built on top of the platform. The price of ETH hit a whopping $15 at the time and the DAO raised over $100M.

Then a hacker exploited a bug in the smart contract and blew up the DAO and caused Ethererum to split into two separate blockchains. The value fell and lingered. I thought I had lost my small gamble.

Today the alternative chain, Ethereum Classic (ETC), is worth more than ETH was back then, and ETH just hit $375. When I finally got my original $400 investment in the DAO unlocked from the contract and converted back into ETH, it was worth more than $10,000. WIN for the crypto savages!

Will this craziness continue?

Bitcoin pioneer Charlie Shrem tweets:

“ETH is rising because new users want to "get rich quick with ICO's". They don't care about the ETH price, and they aren't holding.”

To which someone responded: "That's a feature, not a bug."

These are both completely true and it's precisely why the price continues to rise for ETH. As new ICOs (initial coin offerings) are offered on top of Ethereum, people must buy ETH in order to participate in these new crowd sales. This spikes trading volume above normal levels and drives the price higher. I think the price of ETH can climb even further in the short term as more projects get ready to launch.

However, ETH is not a scarce asset like Bitcoin is. Only 21 million bitcoin will ever exist. ETH does not have a fixed supply. Therefore, I think bitcoin will ultimately be a better store of value for the long term. If I could only invest in one cryptocurrency for the long term, bitcoin is still my favorite.