Ethereum’s market capitalisation has been catalysed by several developmental factors. Intrinsic value, speculation, and human nature, experts say.

Ethereum, has shown an impressive market capitalization since being crowdfunded by fans in August 2014. The Blockchain smart contract platform at the time of writing, stands at over $658 mln, second only to Bitcoin.

Ethereum success factors

Jani Valjavec, the co-Founder at Cashila, speaking to Cointelegraph, says that there are a number of factors that have brought Ethereum to its current market cap.

Valjavec identifies the first factor as the peculiar stage of life of the entity. He says that Ethereum is approaching the stage of its next release cycle in its development, and this gave the assurance that the entity is very much alive and developing.

The second factor is what he described as the ‘escape’ from Bitcoin. He says that due to the ongoing argument whether all is well with Bitcoin or not, a good number of crypto users started shifting grounds from Bitcoin to Ether.

He identifies the third factor as the fact that a lot of people within the crypto world do have very high expectations about the projects that can be built on the Ethereum platform.

Jani Valjavec, Co-Founder of Cashila

Intrinsic value of Ethereum

Having identified these fundamental factors, Valjavec notes that as Ethereum grew in value, speculative traders joined the trade wagon and this affected the upward surge  in value. Nevertheless, he sees the major reason for Ethereum growth as its intrinsic value.

Valjavec says to Cointelegraph:

“All in all the primarily reason for growth was intrinsic value of Ethereum as a network and platform. And that is something that will maintain growth in future. Imagine this was 100 years ago, and we just found oil, then  we are trying to figure out if that has any value. Well, when the first set of engines are produced, it has value.”

He explains that when all the products are able to appear because oil is needed, daily production and price will rise. It is the same here.

Valjavec assures that Ethereum will prove to be useful for solving more and more problems, and market capitalization will improve.

Greed and fear of missing out

On the other hand, Thor Thurneau, co-Founder at BuyAnyCoin  thinks that the prevalent phenomenon that could explain Ethereum success is a paradigm shift, the paradox of human minds.

He says that many involved with crypto, be it Bitcoin or Ethereum, have a natural discourse for the banking sector yet in a rabid style seem to actively base Ethereum success on how many financial institutions they are involved with.

However, what we are witnessing is a paradigm shift, in which people and businesses who already acknowledge Bitcoin’s potential, are realizing that Bitcoin is just a brand and it is not the best brand.  

Thurneau says to Cointelegraph:

“To put it simply I think we are just witnessing greed, fear of missing out and the general fickle nature of humans.”