Cryptocurrency Ethereum hits record high, lifted by bitcoin, institutional demand

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NEW YORK (Reuters) – Ethereum, the second largest cryptocurrency in terms of market cap and volume, hit a record high Thursday, lifted by growing institutional interest in outer space and more than a week after its futures started on the Chicago Mercantile exchange .

FILE PHOTO: The representation of the virtual currency of Ethereum on the PC motherboard can be seen in this image on February 3, 2018. REUTERS / Dado Ruvic / illustration

The virtual currency hit an all-time high at $ 1,938, most recently up 4.6% to $ 1,936.94.

The CME last week launched futures on ether, the digital currency or token that facilitates transactions on the Ethereum blockchain. In the crypto world, the terms ether and ethereum have become interchangeable.

Increasing institutional involvement in cryptocurrencies pushed Bitcoin, the largest and most popular crypto asset, to a high of $ 52,640 on Wednesday.

“Ethereum is really undervalued, and I think it was … because of its more complex narrative,” said Luis Cuende, co-founder of Aragon, a decentralized application to the Ethereum blockchain.

“A global computer network for Web3 (Internet 3.0) is extremely exciting and new. I would say in the next three months we could see Ethereum hit $ 2,500. “

Bitcoin, on the other hand, is currently in consolidation mode after hitting a record high. It was last down 0.3% to $ 52,000. Mainstream investors and companies that have recently switched to Bitcoin have included Tesla, Mastercard, and BNY Mellon.

Jeffrey Gundlach, the billionaire board member of the investment firm DoubleLine Capital, is the youngest of the traditional investors who have apparently set Bitcoin differently. In a tweet on Thursday, he said that Bitcoin could be the stimulus asset, not gold, adding that “a lot of liquid poured into a funnel creates a current”.

Last month, Gundlach said he was neutral to Bitcoin due to its volatility, downgrading his outlook of being overweight.

Another beneficiary of Bitcoin’s rise as a mainstream asset was the surge in trading volume for Purpose Bitcoin ETF, the world’s first exchange-traded Bitcoin fund, approved by Canadian regulators. Purpose started acting on Thursday.

In the first hours after launch, more than $ 80 million in purpose was traded. For comparison: The volume of the Bitcoin Fund, a closed-end mutual fund, was around CAD 30 million.

CME data showed that nearly 1,900 ETH futures contracts, or about 92,800 ethers, were traded in the first five days after last week’s start, which is roughly $ 160 million.

Around 27% of the volume came from countries outside the US and more than 33% was traded outside of the US during trading hours.

($ 1 = CAD 1.2698)

Reporting by Gertrude Chavez-Dreyfuss; Additional coverage from Fergal Smith in Toronto; Adaptation by Steve Orlofsky