Ether, the cryptocurrency that powers the Ethereum blockchain, hit a record high on Thursday afternoon as the ongoing volatility in the crypto markets continued to produce large price swings.
At around 1.30pm in London, Ether reached an all-time high of around US$2,592, and while it fell back slightly across the rest of the afternoon it was still hovering at around US$2,559 just after 3pm, up 7.7% over the last 24 hours.
The rise in Ether’s value appears to have some link to chatter across internet forums, as various influencers in the crypto sector move to encourage buyers to back their favoured tokens.
“Once again, the risky mix of social media and easy access to trading in cryptocurrencies has led to heightened speculation. Investors should be extremely cautious about getting caught up in this stampede because Ethereum is still very much a bet”, said Susannah Streeter at Hargreaves Lansdown.
“Its [Ethereum’s] price is being driven primarily by future price speculation rather than an underlying use-case. Predicting the point at which demand subsides and prices begin to fall is very difficult, if not impossible. Traders would be wise to heed the warnings of the Financial Conduct Authority, that if consumers invest in crypto assets, they should be prepared to lose their money”, she added.
Some crypto investors may have decided to adopt a more cautious attitude following a sharp sell-off over the weekend which saw the value of original crypto Bitcoin tumble by just over 10% in the early hours of Saturday morning.
While the reason for the sudden flash crash is unknown, there was speculation that some traders may have been spooked by rumours that the US Treasury was planning to charge several financial institutions with money laundering using cryptocurrency, as well as recent plans by Turkey to ban the use of cryptocurrency as a method of payment.