Crypto Rally Drives Ether to New All-Time High as Bitcoin Nears Fresh Record

Ethereum has grown more important over the past year as the network has become a central platform for many decentralized finance projects, as well as non-fungible tokens (NFTs), which have exploded in popularity.

Ether’s move higher comes in tandem with Bitcoin, the leading crypto asset, which was up close to 7% Monday near $66,000, according to data from CoinDesk. That brings Bitcoin close to its all time high just shy of $67,000, which it reached in October as the first exchange-traded fund holding Bitcoin futures began trading.

The market capitalization of Bitcoin was close to $1.25 trillion Monday, according to data from CoinMarketCap, with Ether near $560 billion.

Bitcoin prices have risen 325% in the last year, while Ether has surged around 950%.

“The recent surge in [Bitcoin] seems to have been caused by investors piling in, seeing it as a hedge against inflation,” said Susannah Streeter, an analyst at broker Hargreaves Lansdown.

“It’s a highly risky strategy given just how volatile the cryptocurrency is, amid other pressures on its valuation like clampdowns by authorities and even comments on social media,” Streeter added.

The analyst pointed to fears over whether recent spikes in inflation are transitory or more long lasting, set against the backdrop of central bank stimulus continuing to flood markets with liquidity. While the U.S. Federal Reserve announced last week that it would begin slowing, or tapering, its $120 billion in monthly bond purchases, the program of quantitative easing is set to remain around until June.

Write to Jack Denton at jack.dentondowjones.com