The cryptocurrency ether hit a new all-time high on Tuesday before dropping sharply as some investors reaped profits from a scorching market with questionable new entrants.
A day after crossing $ 3,000 for the first time, ether, the token traded on the ethereum blockchain, hit $ 3,457.64 on the bitstamp exchange before falling 6% to $ 3,244.
That still leaves him with a gain of around 340% this year. The increase is in part a fallout from flows to bitcoin, which has gained momentum as high profile investors, from automaker Elon Musk Tesla to Wall Street investor Stanley Druckenmiller, embrace it.
It is also fueled by a speculative frenzy in the asset class. Joke cryptocurrency’s dogecoin has risen 9,000% this year to bring its token sum on issue to over $ 54 billion. Other new tokens have proliferated and buyers this week piled on several tiny new coins promoted by pornstars.
“What we’re seeing right now is the definition of speculative excess,” said IG Markets analyst Kyle Rodda, who compared it to the tech bubble madness of two decades ago. .
“There is money thrown at anything in the crypto space,” he added.
With a market cap of $ 376 billion, traders take ether gains much more seriously and say it is catching up with the rise of bitcoin and that ethereum blockchain upgrades are making it more useful. Read more
Against bitcoin, the value of ether has more than doubled this year and peaked more than two and a half years early on Tuesday. Bitcoin, up 90% this year, fell to $ 55,625 while the US dollar strengthened slightly elsewhere.
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