Despite ethereum's meteoric rise in 2017, some experts say it is not in a cryptocurrency bubble.

The cryptocurrency space has grown at an astonishing rate in 2017, and ethereum is a prime example. The world's second-largest digital currency by market cap started off the year at just $8 per coin. As of this writing, it is hovering around $333 per coin. This is a gain of nearly 40 times in the span of less than 12 months.

By many analysts' estimates, ethereum may be a sign that the cryptocurrency world more broadly is in a bubble. (See more: Ethereum Founder on ICOs: "We Are in a Bubble, A Lot of Projects Will Fail.")

The fact that bitcoin keeps setting new price records and that numerous other cryptocurrencies have made similar gains only adds fuel to the fire. And yet, a recent article by Forbes suggests that ethereum may not be part of a bubble.

Digital Currencies in a Bear Market

Although ethereum, bitcoin, and other leading digital currencies have made tremendous gains this year, by some measure they are actually in a bear market. This is because several of these cryptocurrencies have dropped about 20% from a 52-week high. This is one factor that supporters of the movement point to as a sign that ethereum may not be in a bubble.

Although the cryptocurrency market climbed to roughly $200 billion in market cap this year, that still pales in comparison to the tech bubble of the early 2000s. The tech bubble grew to about $1.7 trillion before it burst. By comparison, ethereum appears relatively tiny considering its total market cap hovers around $30 billion.

Sizing ethereum up against other markets also shows that it's not so big. The U.S. market for rare coins, for instance, is about $5 billion annually, while global sales in this area are roughly $8 billion. And the global art market sees about $50 billion in annual sales, according to Deloitte.

Ethereum's Link to Blockchain Apps Supports the Currency

Economist Harry Dent believes that ethereum is "the most credible" of the digital currencies, "as it makes creating new blockchains easier. It advances the whole industry."

This is because ethereum is not capped at a particular number of coins, and the ethereum platform allows developers to build new applications, including smart contracts and initial coin offerings. (See more: Ethereum's "Initial Coin Offering" Trend Becomes Wildly Successful.)

All this suggests that ethereum may have much broader implications for the tech space than other digital currencies, and may even be more important in this area than it is as a digital currency. CoinShares principal Ryan Radloff said "the community that was demanding the product has shown up in full force," and it seems likely that ethereum's backers will continue to support it for the foreseeable future.

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