Amid expectations that the recent GameStop trading frenzy would hasten the adoption of cryptocurrencies and decentralized finance (DeFi), Ethereum came close to a new record high on Tuesday.
The second-largest cryptocurrency by market value raced to $1,457 during the European hours, less than $3 below the lifetime high of $1,459.93 reached last month.
The latest leg higher from $1,200 came alongside turmoil in the stock markets, where brokerage platforms like Robinhood have restricted transactions to rein volatility fueled by Reddit-based retail traders’ coordinated buying in stocks such as GameStop.
The retail frenzy prompted by Reddit forum r/WallStreetBets forced hedge funds to unwind short bets in GameStop, leading to a 1,700% price rally in the 17 days to Jan. 28.
Crypto analysts believe the restrictive actions could bring more users into the DeFi space, which is dominated by Ethereum’s blockchain.
Ether also has a store-of-value appeal, and a growing number of institutions have taken positions in the cryptocurrency, Coinbase’s recently released 2020 annual review said.
While ether is eyeing a new lifetime high, bitcoin is down at least $7,000 from its record price of $41,962 reached on Jan. 8. Bitcoin is up nearly 20% this year, while ether has added more than 25%.