Ethereum hit another all-time high on Tuesday, extending the world’s second-biggest cryptocurrency’s year-to-date gains, amid ongoing expectations that it too will become a dominant form of payment and store of value like bitcoin.
Ethereum was up 12.36% at $3,502.94 according to CoinDesk, a new record and an extension of a rally that has seen its price gain around 360% so far this year. It later pared gains; at last check, the cryptocurrency was up 0.15% to $3277.15.
Bitcoin was down 4.43% at $55,797. It hit an all-time high of more than $64,000 last month.
Interest in cryptocurrencies has surged over the past year, with bitcoin continuously pushing new record highs. Several factors including rising institutional interest and major companies such as Tesla (TSLA) – Get Report buying the digital coin and PayPal (PYPL) – Get Report accepting payment with it have been credited with its rise.
While different than bitcoin, ethereum and the digital token that is its solution to issue payment – ether – more recently have ridden a similar wave. In the crypto world, the terms ethereum and ether are used interchangeably.
“More and more applications are being built on top of the Ethereum network, which is making investors realize that Ethereum is more than just a concept,” said Zhenwu Shi, founder and CEO of blockchain infrastructure firm Infinity Stones.
What’s more, with the creation of Ethereum shifting to so-called Proof of Stake, or PoS – where a person or firm can mine or validate block transactions according to how many coins they hold – Ethereum investors are better able to generate returns, in some cases as high as 8%, Shi said.
Affiliated with the Ethereum blockchain – a digital ledger popular for financial services and sales of so-called non-fungible tokens, or NFTs, and other “cryptocollectibles” – ethereum has jumped about 1,500% in the past 12 months.
PoS could help propel even more interest in Ethereum as solutions for retail investors come forward. Infinity Stones this week announced a partnership with imToken, one of the biggest digital wallet providers that allows retail investors to store and exchange cryptocurrencies.
Through InfSones, imToken wallet users will be able to stake ether directly through their wallets.
To be sure, Ethereum’s climb is stirring predictions of additional gains similar to bitcoin’s meteoric rise, even as some technical indicators flash warnings that the rally may be overextended.
“The market is realizing how fundamentally undervalued ether is given all the development activity on the network,” Vijay Ayyar, head of Asia Pacific at crypto exchange Luno, told Bloomberg on Tuesday. “While one may think ether has risen a lot, when you compare it to bitcoin, there is a long way to go.”
While Ayyar said ether is “bound to correct,” he views its long-term outlook as “very healthy,” with the cryptocurrency hitting $5,000 to $10,000 by early next year.