The cryptocurrency Ethereum broke $4,000 for the first time on Monday and climbed to new highs for the third consecutive day due to bets that it might find new uses, although some analysts say it is overvalued at current levels.
Ethereum is the second largest token by market capitalization, rising more than 6% to just under $4,1
It has soared this year due to the expectation of widespread use, partly because of its role in decentralized finance-“DeFi”-a platform that facilitates cryptocurrency-denominated lending outside of traditional banking.read more
The upcoming software technology changes are seen as reducing supply, which has also promoted the development of cryptocurrencies. At the same time, so far, new institutional investors in the cryptocurrency field have shuddered about Bitcoin.
Chris Weston, head of research at the brokerage firm Pepperstone, said: “Compared with people who don’t follow the market, cryptocurrencies have much more involvement in institutions.”
He added, “And everyone is in Ethereum. It’s not a memetic joke coin, it actually has some applications.”
But some analysts said that the increase in the valuation of Ethereum has not been supported by a wide range of data.
JPMorgan Chase (JP Morgan) analysts wrote in a report to clients on May 7: “The continuous difference in prices relative to online activities raises questions about its valuation.”
The U.S. bank said that factors such as the number of valid digital addresses in its network will be more consistent with prices around $1,000.
In the crypto world, the terms “Ethereum” and “Ether” have become synonymous. Technically speaking, Ethereum is a blockchain network in which applications are embedded, and Ethereum is a token or currency that enables or drives the use of these applications.
On Monday, Bitcoin, the largest cryptocurrency, rose to a three-week high above $59,600. Tesla (TSLA.O) CEO Elon Musk commented on a live TV show on Saturday night that Dogecoin, which has performed well recently, has stabilized after Sunday’s decline.read more
In the past few weeks, there has been strong demand for smaller cryptocurrencies such as Dogecoin, which has brought Bitcoin’s share of the entire $2.5 trillion digital currency market to its lowest point in two years.
Dogecoin started as a social media joke in 2013 and rose by more than 700% last month.
In Musk’s comments, after a 38% plunge in the past 24 hours, its latest transaction price was $0.51. After Musk’s commercial rocket company SpaceX stated that it would accept meme-inspired cryptocurrency Dogecoin as payment, the situation subsequently stabilized.read more
According to CoinMarketCap data, meme-based coins have become the fourth largest digital currency with a market value of 69 billion US dollars. It hit an all-time high above $0.73 on Thursday.
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