Ethereum prices rose on Monday to record levels after Bitcoin also hit all-time highs. The cryptocurrency also known as Ether was trading at around $407.10 in early Monday morning trading, according to data from CoinMarketCap.
The price sets a record and marks a more than 5,001 percent rise in price sin January 1 when the cryptocurrency was trading at $7.98. As of 4:40 p.m. the Ethereum coin was trading at more than $370 per unit, which represents a gain of roughly 6.6%.
Economists believe investor enthusiasm could crash Ethereum prices
Ether has rapidly become one of the best-performing assets of 2017, with prices rising each day.
“The strong interest in bitcoin does boost investors’ appetite for alternative cryptocurrencies where superior gains are also being seen,” said Pavel Matveev, co-founder of Wirex, a personal finance app that provides a cryptocurrency wallet and debit card, according to CNBC. “There is some correlation between cryptocurrencies in this sense but there is also fundamental demand for Ethereum in its own right.”
Matveev added that Ethereum and bitcoin are not directly competing because they serve different needs.
An economist, Prof. Steve Hanke, wrote on Twitter that “this is what a bubble looks like” when he noted the gains, referring to the phenomenon where investor enthusiasm and demand causes an unsustainable rise in prices.
Concern over high prices has prompted some cryptocurrency enthusiasts that a crash in prices might be a good thing. Meaning, a dip in prices could help draw in more potential investors who may be enticed by a possible buying opportunity. Also, more customers would force the platforms to upgrade their capabilities, which subsequently would help digital currencies gain legitimacy.
Ethereum will continue rising in price and could eventually surpass bitcoin
Not every Ethereum enthusiast expects a crash with the cryptocurrency. Daniel Vaughn, a programmer who works on Ethereum-based cryptocurrency products, told Mic that enough individuals, companies, and even governments are building products based on Ethereum to keep the price rising.
“We will certainly see intermittent corrections here and there,” said Vaughn, according to Mic. “But the general trend is definitely upward. It’s a platform, so we will see companies launching products… Some will succeed and some will fail, and that will shake some people’s confidence.”
A product launch is also needed to somehow explain Ether’s current rising price. On Monday morning appeared a new participant in the cryptocurrency market: a new blockchain project called Bancor conducted an “initial coin offering,” and gained $153 million worth of Ether in a couple of hours, which according to Vaughn prompted a “ton of transaction traffic.”
Specialists believe that Ethereum could surpassBbitcoin in value and that it could occur as early as next year.