World’s second-biggest cryptocurrency Ethereum hits new high of $2,150 after Visa agrees to allow crypto-payments on its network
- Ethereum, which hosts the Ether cryptocurrency, traded at under $150 last year
- Cryptocurrencies’ total market capitalisation reached the $2tn value for the first time
- Visa said it would accept the use of USD Coin for trades on its payment network
Blockchain technology Ethereum has seen its price reach a new all-time high of $2,150 following Visa’s decision to allow cryptocurrency for transactions on its platform.
The cryptoasset, which hosts the Ether (ETH) cryptocurrency, was trading at just under $150 a year ago but has soared in value over the last year as its popularity grew among both retail and institutional investors.
It reached a previous record in February before falling steeply as markets took a more cautious turn and then rising again due partly to the £50million sale of a painting by artist Beeple as a non-fungible token (NFT).
Simon Peters, a cryptoasset analyst at eToro, believes Ethereum ‘looks poised to continue its steep ascent’ and calls its massive rise over the last year ‘nothing short of incredible’
Visa’s declaration on Monday last week that it would accept the use of USD Coin for trades on its payment network is the latest sign the mainstream financial industry is embracing virtual currencies.
USD Coin is a stablecoin – a cryptocurrency whose value is pegged to an outside asset like gold – that can run on the Ethereum network. Visa’s move is the first time a large payments firm has allowed such a currency for settlement.
Simon Peters, a cryptoasset analyst at online trading platform eToro, believes Ethereum ‘looks poised to continue its steep ascent’ and calls its massive rise over the last year ‘nothing short of incredible.’
He added that Ether’s use in decentralised finance applications and deposit contracts has contributed to its growing status. This, he observes, ‘reduces the supply in circulation while announcements like Visa’s increase demand, thereby pushing prices higher.
‘Likewise, following the network’s London hard fork in July, billions of dollars of ETH are expected to be burnt – i.e. bought and then destroyed by the Ethereum blockchain – further reducing the overall supply and forcing prices higher still.
‘All of these factors combine to suggest that the following quarter and the remainder of the year could be very healthy indeed for ETH.’
Payment: The cryptocurrency market has received a boost from Visa’s announcement last week that it would accept the use of USD Coin for trades on its payment network
Ethereum’s growth also comes as the cryptocurrency market’s market capitalisation hits the $2trillion figure for the first time, having doubled in value just over the previous two months.
Bitcoin makes up more than half of the market’s total valuation at $1.1trillion. The currency is still slightly down on its mid-March record but was nonetheless trading at $60,547.70 today.
‘Momentum and interest have begun to expand beyond bitcoin and ethereum,’ said Paolo Ardoino, chief technology officer at crypto exchange Bitfinex.
‘As the industry continues to mature, we expect more blockchain-based applications to be introduced to the world, and coinciding with that, a surge of interest around other alternative assets… as they become more market-ready,’ he added.
Blockchain data provider Glassnode, in a research report, said the fact that bitcoin has held the $1trillion market cap for one week is a ‘strong vote of confidence for bitcoin and the cryptocurrency asset class as a whole.’
Famous Bitcoin supporters include Twitter founder Jack Dorsey, the creators of the Gemini cryptocurrency exchange Cameron and Tyler Winklevoss, and Tesla boss Elon Musk, whose tweets praising the digital currency have prompted its value to increase.
Musk has additionally tweeted his approval of Dogecoin, which was originally started as a joke by a pair of software engineers in 2013. Its value has jumped by over 3,000 in the last 12 months while Bitcoin’s has only grown 750 per cent.