Ethereum reaches new record highs with profits exceeding 5000% since the beginning of the year

Ethereum prices surged on Monday to record levels, after bitcoin also hit all-time highs, as appetite for digital assets continues to grow.

The cryptocurrency was trading at around $407.10 in early Monday morning trading, according to data from industry website Coinmarketcap. This is a record level which marks a more than 5,001 percent rise in price since Jan. 1, when ethereum was trading at $7.98.

What is ethereum?

Ether is the name of the cryptocurrency which runs on the ethereum blockchain, which is the technology that underpins the digital coin. But ethereum is often used as shorthand for the digital currency as well.

Ethereum has been designed to support so-called smart contract applications. A smart contract is a computer program that can automatically execute the terms of a contract when certain conditions are met. This use has excited many investors.

Ether is the second-largest cryptocurrency by market capitalization, worth around $36 billion, according to Coinmarketcap.

Why has it rallied?

A number of developments in the ethereum community have supported the price rise. These include:

The formation of a group called the Enterprise Ethereum Alliance (EEA) aimed at linking large enterprises to technology vendors to work on blockchain projects. Companies such as Microsoft and JPMorgan are involved.

Vitalik Buterin, founder of Ethereum, recently met with Russian President Vladimir Putin, signaling that the country might be looking to use the blockchain, giving it further legitimacy.

Singapore's government released a report detailing a test it had carried out to digitalize a national currency using ethereum blockchain technology.

Where does the price go next?

Nicola Duke, a technical analyst at analysis platform Forex Analytix, said that ethereum has pushed through $377, which is a key "resistance level." This is a price that is reached but not exceeded by traders. But now that it is through this level, the next leg up in ethereum could see it reach $476 soon. Duke is a technical analyst using historical price activity to forecast future price movement.

Meanwhile, Wirex's Matveev said that $600 by the end of the year is within reach, which would mark a 47 percent increase from Monday's high.

Source: Bloomberg Pro Terminal

Jr Trader Ivan Ivanov

Read more:

• And for all the bounty hunters: Iran offers $80m for the head of Donald Trump
• US service member and 2 US Defense Dept contractors killed in Kenya attack
• Iranian Quds leader Qasem Soleimani has been killed – how are markets reacting
• A calm end of an otherwise loud 2019
• Old but Gold – Top 5 posts of Varchev Finance