The world’s second-largest cryptocurrency, ether hit a record high, helped by the robust performance of the Decentralized Finance (DeFi) market and increasing institutional interest in digital assets.
Ether climbed to $4,372.35, surpassing its previous record hit earlier this week, and was last up 2 percent on the day. Bitcoin was down a touch at $56,353.
The digital coin has jumped almost 500 percent against the dollar this year as the ethereum blockchain becomes more widely used by peer-to-peer or decentralized – cryptocurrency platforms that enable crypto-denominated lending outside of traditional banking institutions.
The surge has also seen ether, which in the crypto world is also widely referred to as ethereum, handily outperform larger rival bitcoin, which is up about 95 percent against the dollar this year.
According to cryptocurrency data authority CoinMarketCap’s data, Ether’s total value climbed as high as $505 billion before pulling back slightly, exceeding the financial behemoths JPMorgan ($480 billion) and Visa ($496 billion).
The US bank JP Morgan said that the pace of evolution in the ethereum market has “remained rapid” and that there was still room for growth.
Open interest in CME Ethereum futures had increased to $540 million in three months. A similar level of open interest in CME Bitcoin futures took more than two years after listing in 2017, the bank’s analysts said.
“Effectively, once Bitcoin futures became more accepted among institutional investors, they became more comfortable with cryptocurrencies paving the way for a more rapid acceptance of ethereum futures,” JP Morgan said.
Last week, the analysts warned that the cryptocurrency’s increasing valuation was not underpinned by data showing how widely it is used. Factors like the number of active digital addresses in its network would be more consistent with a price of around $1,000.