(Bloomberg) — Ethereum used to be seen as the most likely challenger to Bitcoin’s status as the preeminent cryptocurrency, and the one best positioned to make the blockchain a more useful technology.
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But as Bitcoin and many other cryptocurrencies have soared in recent months — thanks to President Donald Trump’s embrace — Ethereum has struggled to keep pace, despite hosting the second most valuable digital token: Ether. While Bitcoin is up about 160% in the past year, Ether is only up 40%.
To give the token and its decentralized network some momentum again, Ethereum founder Vitalik Buterin and the Ethereum Foundation he founded are throwing their support behind a new startup that hopes to market Ether as the best cryptocurrency for Wall Street .
Vivek Raman, former bond trader at Nomura Holdings Inc. and UBS Group AG, establishes the company Etherealize with investments from Buterin and the foundation. While Buterin’s organization confirmed the funding, she and Raman declined to say how much money was involved. Raman said he and a team of eight full-time employees started operations this month in New York, where they are marketing Ethereum to financial companies while building products that make the network easier for banks to use.
“If there’s a time when it’s going to work, it’s now, when all the headwinds that existed in the past are now suddenly tailwinds, from regulation to technology and Ethereum being ready to have an institutional presence,” Raman said.
Ethereum was launched in 2015 by Buterin and a team of co-founders and quickly gained a reputation as a more intelligent and sophisticated alternative to Bitcoin. The new blockchain introduced by Ethereum is designed to host complicated financial transactions in so-called smart contracts.
During the big cryptocurrency boom of 2017 and 2021, Ethereum was at the center of the action and its price rose much faster than Bitcoin.
But as the sector has come back to life over the past year, Ethereum has fallen out of step with some of the prevailing trends. The biggest of these has to do with the increasingly widespread view that Bitcoin is a scarce asset that can serve as a digital alternative to gold. That idea has only gained momentum since Trump started talking about creating a national strategic Bitcoin reserve last summer.