Ether[ ETH], the second-largest cryptocurrency by market capitalization, has reached an all-time high of $4,000.
As of 10.00 A.M East African Time, ether was trading at $4,130.26, a 4% gain. ETH, which has been on a gaining streak over the past weeks, recorded a 36% weekly gain.
The digital currency’s gain has been powered by speculation from new market entrants betting known as decentralized finance( Defi), which consists of blockchain-based trading and lending platforms that aim to automate many banks’ functions other traditional financial firms.
The Ethereum blockchain serves as the foundation for much of Defi, and it also is the basis for many non-fungible tokens, or NFTs, another hot trend in cryptocurrency markets.
Currently, Ether’s market capitalization stands at roughly $470 billion, approaching the $488 billion stock-market valuations for JPMorgan Chase, the largest U.S. bank.
Additionally, excitement has come from the ETH blockchain’s plan to shift toward a “proof-of-stake” consensus mechanism. The blockchain will undergo the Eth 2.0 upgrade, which will switch the Ethereum blockchain to a proof-of-stake (PoS) consensus from the current proof-of-work (PoW) consensus mechanism.
Bitcoin Follows Ether’s Gain
Bitcoin, the largest cryptocurrency by market capitalization, has also been on a gaining streak jumping above the $59,000 mark before declining slightly.
As of 03:17 UTC, bitcoin was trading at $ 59,217, a 0.5% 24 hour gain. However, the largest cryptocurrency declined shortly after trading at $58,772 as of 10.45 A.M East African Time.
Mainstream investors and some corporate buyers like Tesla flocked to bitcoin earlier this year, viewing the digital coin as a potential inflation hedge as central banks worldwide print money to relieve coronavirus-battered economies. Major Wall Street banks like Goldman Sachs and Morgan Stanley have also sought to provide their wealthy clients with bitcoin exposure.
However, some investors still aren’t buying the crypto craze. Michael Hartnett, the chief investment strategist at Bank of America Securities, said bitcoin’s rally looks like the “mother of all bubbles,” while Alvine Capital’s Stephen Isaacs said there are “no fundamentals with this product, period.”