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, below bitcoin’s $48.91 billion valuation.
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.
- A surge in so-called initial coin offerings (ICO) which is a new way for cryptocurrency start-ups to raise money.
- Vitalik Buterin, the 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.
“Ethereum’s market message at the moment is that of the underdog to bitcoin with more potential. The complexity of the developing ethereum ecosystem is galvanizing adherents as well as displaying the functionality that it has to offer,” Charlie Hayter, CEO of industry website Cryptocompare, told CNBC by email.
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 53 percent increase from Monday’s high.