Digital currency Ether hit a record Monday a day after Bitcoin breached $ 34,000 for the first time as cryptocurrencies continue to rise.
Ether hit a high of about $ 1,010, the first foray that topped $ 1,000, after a 30% increase on Sunday. Bitcoin held most of its weekend gains, dropping about 1.5% as of 10:40 a.m. Monday in Tokyo to $ 33,069. The largest cryptocurrency eclipsed the 2017 record late last year and only reached $ 20,000 for the first time in mid-December.
Proponents of Bitcoin argue that it is engaged in gold as hedging against the weakness of the U.S. dollar and the risk of inflation, and cite evidence of growing interest among institutional investors. Skeptics see the more than 300% increase in digital assets over the past year as a risky bubble driven by investors pursuing the momentum of cryptocurrency prices.
“The engines of the crypto rally, if any, are strengthening amid still low interest rates, political uncertainty” and the prospect of greater government stimulus, Julian Emanuel, chief strategist at equity and derivatives of BTIG LLC. But he added that volatility can work both upwards and downwards.