Ethereum joins in bitcoin-led rally, taking its gains to more than 25 per cent over the past three days.
Ethereum, the second largest cryptocurrency by market capitalisation after bitcoin, jumped 7 per cent to its highest point since June 2018 on Monday.
Traders said ethereum, which often moves in tandem with bitcoin, has been boosted by growing demand ahead of an upgrade to its blockchain network – due in early December – that is widely expected to make it quicker and more secure.
The upgrade could mean “more people and businesses can use ethereum for economic activity, rather than just financial trading,” said Ross Middleton, co-founder of cryptocurrency exchange DeversiFi.
Ethereum, like bitcoin, is mostly popular among speculative traders. It has gained little mainstream use in retail stores or restaurants. It is used extensively for purchases online.
The price of these so-called altcoins is closely tied to bitcoin. Less liquid than their bigger cousin, they tend to suffer from even greater volatility than the original cryptocurrency.
Smaller coins have rallied as crypto investors took gains from bitcoin’s stunning recent rally, which has seen it rise around 10 per cent in the last week.
Bitcoin was last up 1 per cent at $18,603, its all-time high of $19,666 hit in Dec. 2017 in sight. It has soared around 160 per cent this year.
Bitcoin’s gains have been fuelled by a demand for risk-on assets amid unprecedented stimulus measures to combat the damage from the COVID-19 pandemic.
With governments and central banks in full stimulus mode, investors have also sought out bitcoin for its perceived resistance to inflation.