Cryptocurrency Ethereum has broken above $3,000 U.S. to set a new record high in an aggressive rally that has pushed its gains for the year past those of Bitcoin, with investors betting that Ethereum will be of greater use in a de-centralized future financial system.
Ethereum, a digital token that’s transacted on the Ethereum blockchain, rose 3% on the Bitstamp exchange to $3,144.81 in European trading on May 3. It is up 325% year-to-date, outpacing a 95% rise in Bitcoin.
In part, the big rally is a catch-up to late 2020 gains in Bitcoin, say analysts. It also reflects improvements to the Ethereum blockchain, and a growing shift towards “DeFi”, or de-centralized finance, which refers to transactions outside traditional banking for which the Ethereum blockchain is critically important.
The launch of Ethereum exchange-traded funds in Canada and surging demand for Ethereum wallets to transact non-fungible tokens (NFTs) such as digital art has also pushed up the price.
Bitcoin, which remains the world’s biggest cryptocurrency with more than a $1 trillion U.S. market capitalization, regained the $50,000 U.S. mark last week and is currently hovering around $58,700 U.S., up 4% but well below its record high of $64,895.22 U.S.