Ether (ETH), the main token issued on the Ethereum blockchain, outperformed Bitcoin by more than 170% from late March 28 to the middle of May. The incredible bull run caused ETH to reach an all-time high close to the $4,500 level. However, the trend has reversed, and Ether is not recovering along with Bitcoin. It is unclear if ETH will ever be able to fully return to these previous levels unless we go through another rally in the next few weeks.

The biggest driver behind Ether's recent gains came from traders buying the token on margin and then selling it later, but this was the same reason the token plunged. As of May 13, the total amount of Ether traded was US$11 billion, representing a 32% gain from the previous week. In that same timeframe, the price of Ethereum's main rival Bitcoin declined by 7%.

Although Ether's strong rise could be attributed to investors' anticipation of Ethereum's smart-contract (Smart) development, the recent collapse in Bitcoin and Ethereum prices might have also contributed to this movement. Cryptocurrency markets are very volatile, as demonstrated by the sharp fluctuations in Ether's price and in Bitcoin's.

In December, the two cryptocurrencies had a major price war, as investors flocked to Bitcoin when the price of the cryptocurrency reached record highs, only to find that its price would eventually dip before taking a major nosedive, thus making Bitcoin far more expensive than Ethereum.

One problem with Ether is that fundamental analysis does not anticipate circulation anytime soon. Bitcoin, on the other hand, is now legal tender in El Salvador. Bitcoin is the currency of choice in Venezuela and Zimbabwe because the fiat currency in those two countries is practically worthless as a result of constant hyper inflation. We don't see this happening with Ether despite the efficiency and greater functionality of the Ethereum blockchain.

Until Ether shows signs of it attaining circulation, the token will remain an investment commodity subject to significant speculation. It will always lag behind Bitcoin, and this is almost by design because the Ethereum blockchain development team never intended for it to be used in this fashion.