Ethereum, an alternative cryptocurrency to bitcoin, hit a fresh record high on Sunday, amid continued interest in the digital asset space and increased trade from Asia.
On Sunday, ethereum traded at an all-time high of $250.41, according to data from industry website CoinDesk. This is up 2,839 percent from the $8.52 handle it had on January 1. Ethereum was trading at around $246.62 on Monday morning, slightly off its record high.
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.
What's behind the rally?
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. It's this practical use of ethereum which has excited many large corporates and investors, and led to the rally.
But there are a number of other reasons supporting the price. These include:
- A group called the Enterprise Ethereum Alliance (EEA) was recently founded to connect large companies to technology vendors in order to work on projects using the blockchain. Companies involved in the launch include JPMorgan, Microsoft and Intel. A further 86 companies were recently added to the alliance, helping to give legitimacy to the technology.
- There's been a surge in initial coin offerings (ICO) which is a new way for cryptocurrency start-ups to raise money. These ICOs have been worth tens of millions of dollars and many of the companies are based on the ethereum blockchain, which means that it would utilize ether tokens, helping to boost the price.
- Vitalik Buterin, the founder of Ethereum, recently met with Russian President Vladimir Putin. Industry publication The Cointelegraph reports that Putin and Buterin discussed the application of the technology in the country. Cryptocurrency experts said further regulation and government intervention could help the price of bitcoin and ethereum.
South Korea driving trade
Much of the trading volume in ethereum at the moment — around 38 percent — is coming from South Korea, according to industry website CryptoCompare with rising interest from other regions.
"All major Asian exchanges, including ours, are currently overwhelmed by the sudden growth in our client base and trading activity," Aurelien Menant, founder and CEO of Gatecoin, a regulated bitcoin and ethereum exchange based in Hong Kong, told CNBC by email.
"Specifically, requests for more ether trading pairs seems to be a common theme," Menant added, highlighting the growing interest for traders based in a number of countries.