Ethereum's ether (ETH) cryptocurrency logged a new record high on Tuesday, amid expectations the recent GameStop (GME) trading saga would accelerate the adoption of cryptocurrencies and decentralized finance (DeFi).
The second-largest cryptocurrency by market value briefly topped $1,500, hitting $1,500.63, during early U.S. trading hours on Tuesday, passing the previous record price $1,459.93 last month, according to CoinDesk 20 data. In recent trading, ETH was at 1.494.26, up 14.28% over the last 24 hours.
The latest leg higher from $1,200 came alongside turmoil in the stock markets, where brokerage platforms like Robinhood have restricted transactions to rein volatility fueled by Reddit-based retail traders' coordinated buying in stocks such as GameStop. The retail frenzy prompted by Reddit forum r/WallStreetBets forced hedge funds to unwind short bets in GameStop, leading to a 1,700% price rally in the 17 days to Jan. 28.
Crypto analysts believe the restrictive actions could bring more users into the DeFi space, which is dominated by Ethereum's blockchain.
"With investment and trading platform Robinhood halting trading of certain assets like GameStop and Nokia (NOK), and Nasdaq President and CEO Adena Friedman calling for regulations to prevent retail investors from coordinating on social media, the case for cryptocurrencies only grows stronger," Nicholas Pelecanos, head of trading at NEM Group, told CoinDesk.
According to Messari's Ryan Selkis, the door for mass adoption of bitcoin, ethereum, DeFi and Web 3.0 assets has been flung open. "Buy ethereum to secure the fledging decentralized financial system and potentially make a lot of money, but also to tell your bank to f**k off," Selkis noted in Thursday's daily market brief.
Ether also has a store-of-value appeal, and a growing number of institutions have taken positions in the cryptocurrency, according to Coinbase's recently released 2020 annual review.
While ether breaking a new lifetime high, bitcoin is down by near $7,000 from its record price of $41,962 reached on Jan. 8. Bitcoin is up about 18.59% this year, while ether has added more than 97%.
UPDATE (Feb. 2, 17:00 UTC): Updates to add new record, briefly topping $1,500.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.