Ether, the digital token on the Ethereum blockchain, is the second largest cryptocurrency in the world in terms of market value.
Jaap Arriens | NurPhoto via Getty Images
LONDON – The cryptocurrency ether hit a new all-time high on Friday, rising above $ 1,700 for the first time.
Ether, the second largest digital coin in the world by market value, rose 11.2% to a price of $ 1,743 at around 10:30 a.m. CET, according to CoinDesk.
It comes after Bitcoin, the most valuable virtual currency, hit a record high of nearly $ 42,000 last month.
The price of Bitcoin has more than quadrupled over the course of 2020 and has increased 29% since the beginning of 2021. Ether is up 129% since the start of the year.
Ether has risen steadily this week as investors wait for the highly anticipated launch of Ether futures contracts from the Chicago Mercantile Exchange next week.
Trading in ether futures is scheduled to begin on Monday. The CME launched Bitcoin futures over three years ago at the height of the 2017 rally for this cryptocurrency.
Some investors believe that futures and other crypto-focused derivatives will give institutional investors more confidence to invest in this space.
“The introduction of more financial instruments brings more participants into the market,” said Sachin Patodia, partner at Avon Ventures, a venture capital fund affiliated with Fidelity’s parent company. “That is probably positive for the ether price.”
But Patodia said a big driver of the price of ether – and other smaller digital currencies – has been the momentum for Bitcoin in recent months.
“We’ve seen this pattern over many crypto cycles where bitcoin is driving price movement, and then you see what we call altcoins get carried away,” he said.
Ethereum, the network of Ether, was created after Bitcoin in 2013. The main difference from Bitcoin’s blockchain is its ability to support applications.
“This move by the CME may result in another purchase of ether by new entrants as it gives discerning investors the ability to hedge their exposure against positions they may hold in the underlying asset,” said Simon Peters, cryptoasset analyst at Online Investment platform eToro, said CNBC.
“It is worth noting, however, that CME Ether futures such as Bitcoin are settled in cash so as not to involve physical delivery. Therefore, we should not necessarily expect a significant impact on spot prices.”
Crypto investors said another factor that could potentially boost the airwaves is the start of a major upgrade to the Ethereum blockchain called Ethereum 2.0. Aether believers hope the upgrade will make Ethereum faster and safer.
The total market value of all cryptocurrencies combined reached $ 1 trillion last month when the price of Bitcoin hit record highs. Bitcoin bulls say institutional demand and the perception that it is a store of value similar to gold has received a boost.
Bitcoin rose 4.7% in the past 24 hours and was trading at a price of $ 38,151. XRP, the third largest digital token, rose 10.7% to 44 cents.
However, skeptics like economist Nouriel Roubini say that Bitcoin and other cryptocurrencies have no intrinsic value. A recent survey by Deutsche Bank found that investors view Bitcoin as the most extreme bubble in financial markets.