Ether hits record high as 2021 gains near 500%

LONDON: Cryptocurrency ether hit a record high on Wednesday, taking gains this year to almost 500 per cent on the back of a growing interest in decentralised finance applications and increasing institutional interest in cryptocurrencies.

Ether, the second-biggest cryptocurrency by market capitalisation ater bitcoin, climbed to $4,372.35, eclipsing its previous record hit on Monday, and was last up 2 per cent. Bitcoin was down a touch at $56,240.

Ether has jumped almost 500 per cent against the dollar this year as the ethereum blockchain becomes more widely used by peer-to-peer - or decentralised - cryptocurrency plaforms 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 - outperform bitcoin, which has almost doubled in price this year as larger investors warm to the emerging technology.

US bank JP Morgan on Wednesday said 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, the bank’s analysts said in a note. A similar level of open interest in CME Bitcoin futures took more than two years ater listing in 2017, they added.

“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.