Ethereum surpasses $ 3,000 to quadruple in value in 2021
SINGAPORE (Reuters) – Cryptocurrency ether broke above $ 3,000 on Monday to set a new record in a dazzling rally that outperformed biggest bitcoin, as investors bet ether will be used more and more in a future decentralized financial system.
Ether, the token traded on the Ethereum blockchain, rose 3% on the Bitstamp exchange to $ 3,051.99 at lunchtime in Asia. It’s up over 300% for the year so far, easily surpassing a 95% rise in the more popular bitcoin.
In part, the big rally is catching up on late 2020 bitcoin gains, said James Quinn, managing director of Q9 Capital, a private cryptocurrency wealth manager in Hong Kong.
It also reflects improvements to the ethereum blockchain, he said, and a growing shift towards “DeFi,” or decentralized finance, which refers to transactions outside of traditional banks for which the ethereum blockchain is a platform. – crucial shape.
“In the beginning, the rally was really bitcoin-led, because as many institutional investors have come to space, this would be their first natural port of call,” Quinn said.
“But as the rally has matured over the past six months, you have DeFi and a lot of DeFi is built on Ethereum.”
The launch of ether exchange-traded funds in Canada and the growing demand for ether wallets to deal with non-fungible tokens such as digital art have also pushed the price up.
The ether / bitcoin cross rate has climbed more than 100% this year and hit a 2.5-year high on Sunday, indicating a degree of rotation in the second-largest cryptocurrency as investors diversify their exposure.
“Soaring DeFi volumes continue to drive Ethereum prices higher as investors gain confidence in crypto and view Ethereum as a safe second-place asset,” said Jehan Chu, managing partner of the capital firm. Hong Kong blockchain risk, Kenetic Capital.
Illustrating the dynamics of these new transactions, Bloomberg reported last week that the European Investment Bank is planning to issue a digital bond on the Ethereum blockchain, while JP Morgan is planning a managed Bitcoin fund.
Bitcoin, the world’s largest crypto asset with over $ 1 trillion in market capitalization, rebounded to $ 50,000 last week and hovered around $ 58,000 on Monday, up around 3% but well below of his record $ 64,895.22.
The US dollar was broadly stable.
(Reporting by Tom Westbrook and Vidya Ranganathan; Editing by Himani Sarkar & Shri Navaratnam)