Why Ethereum Was Bumping Higher on Tuesday

One of the great promises of Ethereum's (CRYPTO: ETH) blockchain is that it's a go-to for people wanting to use it for smart contracts. With the chain's rise came the inevitable proliferation of competitors aiming to provide such functionalities cheaper, faster, and better.

On Tuesday, however, the market got an indication that Ethereum was doing better than many might have expected. As a result, the coin's value was rising by over 4% late Tuesday afternoon, as of 4 p.m. ET.

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Return to No. 1

According to a report published on crypto industry site Coindesk.com, citing data from DefiLama, in March Ethereum was the most popular smart contract blockchain for decentralized exchange (DEX) asset trading. It reclaimed its No. 1 spot from peer Solana.

All told, Ethereum's system handled total trading volume of over $64.6 billion during the month, easily topping Solana's $52.6 billion. This is the first time since September that Ethereum has bested its rival.

It wasn't immediately clear why trading shifted in favor of Ethereum. The general decline in all types of cryptocurrencies likely played a role -- in bear markets, participants tend to act more conservatively, and in this instance, they might have considered the older Ethereum chain to be safer in some ways.

Improving sentiment

Tuesday was a relatively good day for digital coins and tokens, as the gloom that has blanketed the cryptosphere lifted a bit. Some investors are bullish that the tariff war that is anticipated to kick off on Wednesday will be watered down to more of a skirmish or spat; in that case, the damage to many corners of the economy -- including cryptocurrencies -- could be limited.

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Eric Volkman has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum and Solana. The Motley Fool has a disclosure policy.