Ethereum blockchain’s digital token, surpassed $3,000 on Monday, setting a new all-time high and diverting attention away from bitcoin, the world’s largest cryptocurrency.
Ether’s price increased by about 8% Monday morning and was trading at about $3,150 as of 6:45 a.m. ET, according to Coinbase reports. The token is up more than 300 percent year to date, far outpacing bitcoin’s 95 percent gain.
Bitcoin’s price also increased by approximately 3% Monday, increasing its market capitalization to approximately $1.1 trillion, according to Coinbase. According to Coinbase numbers, Ethereum’s market capitalization is around $366 billion.
Ethereum’s meteoric rise is a result of the enthusiasm around DeFi, or decentralized finance, and investors recognizing the Ethereum blockchain’s strong potential for additional applications. The decentralized finance movement aims to largely displace banks as the primary repository for financial transactions such as investing, lending, and trading.
Ethereum’s decentralized network, which enables numerous software developers to create applications, is especially appealing to DeFi evangelists. Ether is the Ethereum blockchain’s native token.
Non-fungible tokens, or NFTs, are a common trend in the so-called decentralized app space, with many of them built on the Ethereum blockchain. NFTs are digital assets that serve as a means of transferring ownership of virtual objects such as artwork and sports memorabilia. In recent months, some NFTs have fetched eye-popping values, and the possibility of companies capitalizing on the trend has sent a handful of stock prices soaring.
Institutional investors and big US corporations are increasingly embracing the crypto environment. Bloomberg announced last month that the European Investment Bank wants to launch a digital bond on the Ethereum blockchain, boosting Ether’s price above $3,000 for the first time. Additionally, Coindesk announced last week that JP Morgan intends to launch a bitcoin controlled fund.
Nonetheless, the crypto trend has come under fire from some conventional investors. Charlie Munger, vice chairman of Berkshire Hathaway, said Saturday that the growth of bitcoin is “disgusting and counter to civilization’s interests.”
“Of course I despise bitcoin’s success,” Munger, 97, said during a question-and-answer session during Berkshire’s annual shareholder meeting. “I am not in favor of a currency that is so useful to kidnappers, extortionists, and others, nor am I in favor of simply handing over your extra billions of dollars to someone who created a new financial commodity out of thin air.”