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LONDON (Reuters) – Digital currencies Ethereum and XRP rose on Monday, gaining momentum as bitcoin moved towards its all-time high.
Ethereum, the second largest cryptocurrency by market cap after bitcoin, has jumped 7% to its highest since June 2018, taking its earnings to over 25% in the past three days alone.
Traders said ethereum, which often moves in tandem with bitcoin, has been spurred by growing demand ahead of an upgrade to its blockchain network – expected in early December – which should make it faster and more secure.
The upgrade could mean “more people and companies can use Ethereum for economic activity, rather than just financial trading,” said Ross Middleton, co-founder of cryptocurrency exchange DeversiFi.
Ethereum, like bitcoin, is mostly popular with speculative traders. It has gained little mainstream use.
The third largest XRP coin has risen 22% to its highest in over two years. It has gained around 75% in the past three days, although two traders said there was no immediate news for its leap.
The price of these so-called altcoins is closely linked to bitcoin. Less liquid than their larger cousin, they tend to suffer from even greater volatility than the original cryptocurrency.
Smaller coins rallied as cryptocurrency investors took gains from bitcoin’s recent extraordinary rally, which saw it rise about 10% over the past week.
Bitcoin was up 1% to $ 18,603, its all-time high of $ 19,666 reached in December 2017 in sight. This year it has grown by about 160%.
“Bitcoin has skyrocketed, profits have been taken, profits have returned to altcoins,” said Joseph Edwards, head of research at crypto brokerage Enigma Securities.
Bitcoin’s earnings have been fueled by demand for risk assets amid unprecedented stimulus measures to combat the harms of the COVID-19 pandemic.
With governments and central banks in full stimulus mode, investors have also sought out bitcoin for its perceived resistance to inflation.
Reporting Tom Wilson; Editing by Kirsten Donovan
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