The cryptocurrency ether runs on the Ethereum network.

Dado Ruvic/Reuters

  • The price of ether surged to an all-time high Friday in lockstep with bitcoin's rally to just shy of $60,000.
  • "The main takeaway for me is that the increased capital flows into crypto is now making its way into more than just [bitcoin]," Jeffrey Wang of Amber Group told Insider.
  • Sergey Nazarov, co-founder of Chainlink, also attributed the surge in ether to the rise of decentralized finance, or DeFi.
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The price of ether, the world's second-largest cryptocurrency by market capitalization, surged to an all-time high Friday in lockstep with the rally in the price of bitcoin.

Ether climbed to a high of $2,077 at around 11 a.m. ET. It first broke the $2,000 threshold around 9:50 am ET Friday. The digital asset for the ethereum network has gained 177% in 2021 alone and 1,370% in the past 12 months.

"It's very positive to see [ether] rally along with [bitcoin] which has been the de facto flag bearer for crypto assets," Jeffrey Wang, Head of America's at Amber Group, told Insider. "The main takeaway for me is that the increased capital flows into crypto is now making its way into more than just [bitcoin]."

Wang also said investor diversification bodes well for the whole cryptocurrency space, which has seen a broader rally in recent weeks, boosted by the economic recovery from the pandemic-led recession and the third round of stimulus checks under the Biden administration.

Bitcoin this week has flirted with the $60,000-level on renewed institutional backing from PayPal, Visa, and CME Group.

"[Bitcoin] is a benchmark for investors' confidence in store of value, while interest in assets like [ether] that focus on the programmable, smart contract side of the ecosystem show investors optimism for the utility and potential of decentralized finance," John Wu, President at Ava Labs, the team behind Avalanche, told Insider. "Ethereum breaking past this threshold may result in a paradigm shift that will benefit the two to three smart contract networks gaining real traction with decentralized finance."

Sergey Nazarov, co-founder of Chainlink lab,a decentralized oracle network, also attributed ether's rally to the rise of decentralized finance, or DeFi, an umbrella term for various applications that use public blockchains and crypto assets to disrupt the traditional financial sectors.

"Ethereum users are now relying on DeFi applications in order to lend, borrow, earn yield, create derivatives, options, and even trade, all without the reliance of any centralized third party like a bank or a fintech like Robinhood," Nazarov told Insider, adding that this new sector, worth over $45 billion, is the fastest growing in the cryptocurrency industry.

"I would expect to see more users utilize DeFi on Ethereum as they hunt for yield that ranges in the double digits," Nazarov said. "I wouldn't be surprised if the total value locked into DeFi apps on ethereum surges past hundreds of billions of dollars."

Read the original article on Business Insider