UPDATE 2-Digital coin ether hits record high as 2021 gains near 500%

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By Ritvik Carvalho and Gertrude Chavez-Dreyfuss
LONDON/NEW YORK, May 12 (Reuters) - Cryptocurrency ether hit
another record high on Wednesday, taking gains this year to
close to 500% on the back of growing interest in decentralized
finance applications and increasing institutional interest in
cryptocurrencies.
Ether, the second-biggest cryptocurrency by market
capitalization after bitcoin, climbed to $4,380.64.35, but was
last down 4.1% at $4,029. Bitcoin BTC=BTSP was also down more
than 4% at $54,188.
Ether has jumped about 470% against the dollar this year as
the ethereum blockchain becomes more widely used by peer-to-peer
- or decentralised - cryptocurrency platforms that enable
crypto-denominated lending outside of traditional banking
institutions.
The surge has also seen ether - which in the crypto world is
also widely referred to as ethereum - outperform bitcoin, which
has almost doubled in price this year as larger investors warm
to the emerging technology. "Ethereum is growing in part by the prospects of a revamped
network with the right upgrades highly anticipated to
accommodate DApps (decentralized applications) and smart
contracts that are built on it," said Nick Spanos, co-founder of
Zap Protocol, a blockchain-agnostic decentralized network. "The
coin is bound to grow more in the near future, with an ambitious
target of $10,000 by year end."
U.S. bank J.P. Morgan on Wednesday said the pace of
evolution in the ethereum market has "remained rapid" and that
there is still room for growth.
Open interest in CME Ethereum futures had increased to $540
million in three months, the bank's analysts said in a note. A
similar level of open interest in CME Bitcoin futures took more
than two years after listing in 2017, they added.
"Effectively, once bitcoin futures became more accepted
among institutional investors, they became more comfortable with
cryptocurrencies paving the way for a more rapid acceptance of
ethereum futures," J.P. Morgan said.
Still, U.S. regulators warned investors on Tuesday over the
risks of bitcoin futures in mutual fund investments. In a
statement, the Securities and Exchange Commission said bitcoin
was a highly speculative market that lacked regulation.
The same J.P. Morgan analysts said last week that ether's
increasing valuation was not underpinned by data showing how
widely it is used.
Factors such as the number of active digital addresses in
its network would be more consistent with a price of around
$1,000, the U.S. bank said. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Ether outperforms Bitcoin in 2021 https://tmsnrt.rs/2RNwn9C
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