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Ethereum Expected to Split Again in October

Ethereum, a cryptocurrency that uses blockchain technology, is expected to split on October 17.

So far this year, we've already seen Bitcoin split into two and form Bitcoin Cash.

Now Ethereum, another popular cryptocurrency that also uses blockchain technology, is expected to split on October 17.

In Ethereum's last update during 2016, the split created Ethereum Classic. Ethereum now has a market cap of $27.8 billion as it heads toward its October split. 

Cryptocurrencies Are Maturing Rapidly

Ethereum, of course, is not alone in its momentum.

Ryan Radloff, head of investor relations at XBT Provider explains that we are seeing that the crypto-asset space beyond Bitcoin is maturing very fast and that some "investable contenders" are emerging, even if fledgling.

"That said, we believe in the next 18 months, a handful of the crypto-assets currently in the top ten by market cap will also begin to demonstrate enough market depth and breadth to attract large institutional investors like Bitcoin has attracted over the last 12 months," said Radloff.

Ripple and Litecoin, among others, are getting set for primetime on the cryptocurrency stage.

Ethereum Is Very Different

Of course, Ethereum is currently the prince to Bitcoin's king.  

Part what helps it is the easy analog of Ethereum to another beloved commodity -- in a similar fashion that Bitcoin has a real world comparison.

Radloff explains that while his group may asses a portfolio allocation of Bitcoin, similarly to that of gold, they look at Ether differently: similarly to oil.

"Since ether is required to operate the Ethereum virtual machine (EVM) - ether is referred to as the 'fuel' to the EVM engine - our long term approach to valuation looks similar to that of assessing a traditional commodity such as oil - we begin by modeling utility growth of the EVM and thus future consumption of ether," said Radloff.

Radloff explains his current long term view on Ether is predicated on the utility growth of its network, which he expects to be driven at least partly by two key areas: Initial Coin Offerings (ICOs) and Ethereum's decentralized applications to the emerging Internet of Things (IoT).

"We are paying particular attention to the proliferation of both of these use cases for ether and the Ethereum platform to help guide our view on long-term value." said Radloff. 

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Ethereum Behaves Like Oil

Christopher Bendiksen, head of research at CoinShares, said he is seeing a future where Ether behaves in the digital economy somewhat analogous to oil in the physical economy.

"Just as oil fuels combustion engines, ether is required to run computations on the Ethereum Virtual Machine," he said. "It will flow from producers (computation providers) to consumers (computation purchasers) and back again in a repeating economic cycle, producing useful computational work to a global user base of computation purchasers and offering returns of investment for computation providers." 

Bendiksen explains that in a similar fashion to oil, certain levels of ether stockpiling are necessary on the part of ether consumers in order to ensure that programs running on the Ethereum Virtual Machine operate in a smooth, continuous and predictable manner.

"In such a scenario, there exists a persistent working capital demand for ether represented by the total amount stockpiled at any given time, and the total economic value of the working capital requirement can be imagined as a lower bound of the total value of all ether," he said. "Based on projections by leading market data providers, we believe that the working capital requirements alone could necessitate a valuation floor of more than $600 per ether by 2025 and as high as $1,919 in our models."

The October fork is just the beginning.