The world’s second most valuable crypto hit a record high of US$4,158 on Monday morning, giving it a market cap of just under US$474bn
Ethereum, the world’s second most valuable cryptocurrency, surpassed the US$4,000 milestone on Monday morning amid a flurry of fresh speculation over the rapidly expanding Decentralised Finance (DeFi) sector.
In late morning trading in London, Ethereum was up 5.3% over the last 24 hours at US$4,094, giving it a market cap of about US$474bn, after breaching the US$4,000 barrier in the early hours and hitting an all-time high of US$4,158 at 10am.
READ: Decentralised finance – aka DeFi – the blockchain technology that could replace banking
The recent surge means Ethereum’s value has shot up around 461% so far this year, compared to a 98% increase for Bitcoin, the oldest and most valuable crypto with a market cap of over US$1 trillion.
Ethereum’s fortunes have been boosted by increased interest in DeFi, mostly due to the fact that most apps in the sector use its blockchain technology as their foundations.
Another potential driver is Ethereum’s plan to shift to a ‘proof of stake’ mechanism to verify transactions, a less energy-consuming and more scalable method than the ‘proof of work’ system which involves crypto mining.
The subsequent demand for Ethereum has also placed a strain on the supply of the crypto, pushing the price up even further alongside other digital currencies deemed as Ethereum adjacent cryptos such as Ethereum Classic, which has risen by just over 2,000% this year.