Just a week after dogecoin's massive rally, during which the coin surpassed the 70-cent mark for the first time in the lead-up to Elon Musk's hosting appearance on "Saturday Night Live," ethereum is taking its turn in the spotlight.
The coin has been on a massive tear in recent days, nearly doubling in value over the past month. The world's second-biggest cryptocurrency by market cap now costs more than $4,000 per coin, a far cry from the $176 it was commanding a year ago.
Unlike dogecoin, whose rise has been fueled by tweets and Reddit threads, ethereum has support from institutional investors and has been the cryptocurrency of choice for blockbuster multimillion-dollar NFT transactions.
It is built on blockchain technology just like bitcoin, but instead of being viewed by its proponents as a store of value akin to gold, it is seen by investors such as Mark Cuban as having a higher utilization. That's because one of its uses is as infrastructure for a decentralized internet, and people can build apps on the Ethereum network.
With a market cap of $481.8 billion — bigger than Coca-Cola, Snap Inc. and Ford Motor Co. combined — ethereum trails only bitcoin's $1.1 trillion market cap in the crypto world.
An investment in ethereum at the beginning of the year would have seen strong growth over the ensuing months. A $1,000 ethereum purchase on Jan. 1 — at a price of $730.97 per coin — would be worth $5,710.85 at Monday morning's price of $4,174.46, a gain of 471%, according to CNBC calculations.
That beats bitcoin's 2021 growth. A $1,000 bitcoin purchase would be worth $1,984.13 at Wednesday's price of $58,359.98.
It is important, however, to keep in mind that past performance is no guarantee of future returns. Experts have cautioned investors to put no more money into cryptocurrencies than they are comfortable losing. Read CNBC's primer on ethereum here.
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