This month, Bitcoin isn't the only cryptocurrency that has set new highs.
The value of a single ether token touched an all-time high of $4,461.96 on Friday, boosting the market cap of the second-most valued digital asset above $520 billion.
If you acquired ether a year ago, you've made a lot of money in the last year. On Oct. 29, 2020, a $1,000 ether purchase would have earned you 2.61 coins at a price of $382.82, according to crypto exchange Coinbase. Those coins would be worth $11,645.71 at the top on Friday, a gain of more than 1,000 percent.
That return is more than three times better than bitcoin, where a $1,000 purchase a year ago would be worth around $4,476 today.
The S&P 500 climbed 38.8% within the same time period, a small growth in compared to either digital coin. However, unlike cryptocurrencies, which are notorious for their volatility, the S&P 500 is seen as a relatively safe investment, with a decades-long track record of generating profits for investors.
The rise in Ether came after the Ethereum network received a major update on Wednesday. The Altair upgrade is part of the transition to Ethereum 2.0, or Eth2, which will see the network's infrastructure evolve. Ethereum mining will become useless after Eth2 goes operational in 2022.
Ethereum currently uses a highly energy-intensive proof of work (PoW) mechanism, in which miners compete to solve hard puzzles in order to validate transactions. Altair is significant because it tested Ethereum's ability to transition to a proof of stake (PoS) paradigm, in which users validate transactions based on the number of coins they own.
The purpose of Eth2 is to make Ethereum more scalable, safe, and long-lasting. More information about the move's possible impact can be found here.
Remember that past performance is no guarantee of future results when it comes to cryptocurrency. Experts advise against investing more money in cryptocurrency than you can afford to lose.
If you decide to get into crypto, instead of making a significant buy all at once, consider employing dollar-cost averaging to spread out your expenditures over time.