- The second-largest cryptocurrency by market value topped $4,000 on Monday.
- The rise in its value may partly be driven by VanEck filing for a US ETF last week.
- Crypto analyst Megan Kaspar predicted the token could reach between $8,000 to $10,000 by year-end.
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Ether recorded its biggest one-day gain in two years on Monday as the second-largest cryptocurrency smashed past $4,000 for the first time.
Ethereum’s digital token rose 7% in the past 24 hours to trade at about $4,165 as of 5:20. a.m. ET, according to data from CoinMarketCap. This milestone was achieved after ether’s value increased 16% increase in just five days.
This momentum is likely being driven by the asset manager VanEck filing to list an Ethereum exchange-traded fund. The firm has already applied to list a bitcoin ETF, for which the Securities and Exchange Commission has delayed its decision until July.
More investors are betting ether will be fueled by a rise in the use of decentralized-finance applications and nonfungible tokens.
“Decentralized finance’s potential for replacing certain intermediaries with automated digital contracts continues to get more recognition from the traditional banking sector,” Paolo Ardoino, the chief technology officer at Bitfinex, said. “The myriad possibilities of decentralized ledger technologies should be likened to a technological force of nature that will continue to disrupt finance and other businesses.”
When ether was trading at about $1,200, the crypto analyst Megan Kaspar predicted it would hit $3,400. Kaspar, a cofounder of the digital-asset-investment company Magnetic, has now boosted her price target to between $8,000 and $10,000 by the end of 2021.
“The shift to proof of stake for block validation reduces carbon emissions by 99.9%, making Ethereum a green technology,” Kaspar said. “So these two updates on the network alone could push Ethereum to a trillion-dollar market cap, which is where bitcoin is at today. That would make Ethereum around $8,000 to $10,000 a coin.”
Her prediction matches that of Fundstrat Global Advisors’ head of digital-assets research, David Grider. Grider said he expected ether to hit $10,500 by the end of the year based on market data.
And the former Ark Invest analyst James Wang said ether could reach $40,000. The boom in DeFi applications is the major catalyst for him too, as he believes the $3 trillion global banking and auditing industry could be more efficient with software.
“So that’s $3 trillion of existing revenues up for grabs,” he said. “If Ethereum captures just 1% of that economic revenue, ether would be around $40,000.”