Ethereum breaks past $3,000 to quadruple in value in 2021
Cryptocurrency Ethereum broke past $3,000 on Monday to set a new record high in a dazzling rally that has outperformed the bigger bitcoin. Investors bet that ether will be of ever higher use in a decentralised future monetary system, Reuters reported in a statement from Singapore.
Ether, the token transacted on the ethereum blockchain, rose 3% on the Bitstamp exchange to $3,051.99 by lunch break in Asia. It is up more than 300% for the year up until now, quickly surpassing a 95% increase in the more popular bitcoin.
In part, the big rally is a catch-up to late 2020 gains in bitcoin, said James Quinn, handling director at Q9 Capital, a Hong Kong cryptocurrency personal wealth supervisor.
It also reflects enhancements to the ethereum blockchain, he said, and a growing shift towards "DeFi", or decentralised financing, which describes transactions outside traditional banking for which the ethereum blockchain is an important platform.
" At first, the rally was actually led by bitcoin due to the fact that as a great deal of the institutional investors entered into the area, that would be their natural very first port of call," Quinn said.
" But as the rally has developed over the last six months, you have DeFi and a lot of DeFi is built on ethereum."
The launch of ether exchange-traded funds in Canada and surging demand for ether wallets to transact non-fungible tokens such as digital art have likewise risen the price.
The ether/bitcoin cross rate has soared more than 100% this year and hit a 2.5-year high up on Sunday, pointing to a degree of rotation into the second-biggest cryptocurrency as financiers diversify their direct exposure.
"Surging DeFi volumes continue to push ethereum costs higher as financiers acquire confidence in crypto and see ethereum as a safe second-place property," stated Jehan Chu, managing partner at Hong Kong blockchain equity capital company Kenetic Capital.
Showing the momentum for such brand-new deals, Bloomberg reported recently that the European Investment Bank plans on providing a digital bond over the Ethereum blockchain, while JP Morgan plans a managed bitcoin fund.
Bitcoin, the world's biggest crypto property with more than $1 trillion in market capitalisation, regained the $50,000 mark last week and hovered around $58,000 on Monday, up about 3% but well listed below its record high at $64,895.22.