Ether climbed to $4,370 in intraday trading on Wednesday,
according to Coinbase, besting its previous record hit on Monday and bringing
its total market cap to $493bn.
Ether’s rise has come on the back of increased institutional
investor interest in cryptocurrencies fed by Bitcoin’s march towards becoming a
mainstream form of payment.
Retail investors’ fear of missing out (FOMO) is also a
factor, as celebrities and influencers like Tesla and SpaceX chief Elon Musk
boost Bitcoin and other cryptocurrencies on their social media feeds.
Ether has jumped almost 500 percent against the dollar this
year as the Ethereum blockchain that underpins it becomes more widely used on
decentralised cryptocurrency platforms.
Blockchain technology is seen by many as a game-changer in
global finance because it allows peer-to-peer transactions that don’t need to
be verified by a fee-collecting middleman – like a traditional bank.
Ether’s rise has increasingly come at the expense of the
world’s largest cryptocurrency, Bitcoin, which was trading down slightly at
$56,240.
On Wednesday, analysts at JPMorgan Chase said the pace of
evolution in the Ethereum market has “remained rapid” and that there was still
room for growth.
But cryptocurrencies are famously volatile and governments
around the world are wrestling with how to regulate them without stifling
innovation.
On Tuesday, the US Securities and Exchange Commission (SEC)
issued a statement warning investors of the potential risks surrounding
Bitcoin.
“Investors should understand that Bitcoin, including gaining
exposure through the Bitcoin futures market, is a highly speculative
investment,” said the SEC. “As such, investors should consider the volatility
of Bitcoin and the Bitcoin futures market, as well as the lack of regulation
and potential for fraud or manipulation in the underlying Bitcoin market.”
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