Ethereum is the second-largest cryptocurrency and the leading smart contract platform. Unlike Bitcoin's simple transfer mechanism, Ethereum enables programmable applications (dApps), DeFi, NFTs, and tokenized assets.

Why It Matters

Ethereum is the infrastructure layer of the decentralized internet (Web3). Most DeFi protocols, stablecoins (USDT, USDC), and NFTs run on Ethereum or its Layer 2 networks. ETH is used as "gas" to pay for network transactions.

Key Developments

The merge to Proof-of-Stake (September 2022) reduced Ethereum's energy consumption by ~99.95%. ETH staking yields provide a "risk-free rate" of sorts for the crypto ecosystem. Spot Ethereum ETFs launched in 2024.

Market Impact

ETH prices reflect crypto ecosystem health and DeFi activity. The ETH/BTC ratio indicates whether altcoins or Bitcoin are leading the market. Ethereum gas fees reflect network demand.