Ether, the native cryptocurrency of the Ethereum network, hit new multi-year highs early Monday after a double-digit rally last week.
At around 06:35 UTC, Ether, the second largest cryptocurrency by market value, hit USD 1,151 – a level that was last reached in January 2018, according to CoinDesk 20 data.
Prices jumped over 40% last week, posting the largest weekly gain since December 2018.
"The ether thrower has arrived and is catching up with its big brother's bitcoin," Jehan Chu, CEO of Hong Kong-based trading company Kenetic Capital, told CoinDesk. "While Ether hasn't set up a store of value yet, its relatively low price tag will be irresistible to Wall Street investors drunk on Bitcoin profits."
As of press time of $ 1,020, Ether is still down around 43% from the record price of $ 1,433 in January 2017. Bitcoin surpassed its December 2017 high from $ 19,783 last month to climb to $ 34,545. MicroStrategy and several other publicly traded companies diversified their cash holdings into Bitcoin in the second half of 2020, likely adding to the price of the crypto market leader.
According to Chu, MicroStrategy's CEO Michael Saylor and SkyBridge Capital's Scaramucci are now playing about who will make an Aether investment first. "As soon as they take a step, we can expect an insane rush to $ 2,000," he said.
John Ng Pangilinan, Managing Partner at Signum Capital in Singapore, also said that ether could challenge all-time highs. “The ether trading volume closes with the bitcoin trading volume. That shows an aggressive movement of the bulls into the airwaves, ”he said.
According to the data source CryptoCompare, "top-tier" exchanges have registered an Ether trading volume of over 19 billion US dollars in the last 24 hours, compared to 16 billion US dollars for Bitcoin. Ether is now the largest cryptocurrency by trading volume. However, its $ 120 billion market cap is still well below Bitcoin's $ 600 billion.
Aside from increased demand, ether appears to be benefiting from a drying up of liquidity on the sell side, according to Ki Young Ju, CEO of Korea-based blockchain analytics firm CryptoQuant.
The ether reserves for ether have decreased by 20% compared to May 2020. The decline is likely due to investors holding ether directly or decentrally funding their coins or betting on Ethereum 2.0, resulting in a shortage of ether in the market.