Ether Extends Gains To Reach Fresh High Above $460
Ether prices rose today, extending recent gains and hitting a fresh, all-time high.
The price of the digital currency, which is used to power smart contract platform Ethereum, climbed to as much as $467.30 today, according to CoinMarketCap.
At this price, ether was up more than 5,700% year-to-date, additional CoinMarketCap figures show.
The cryptocurrency has climbed more than 16,000% since August 2015, the first time that CoinMarketCap price data is available.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Ether has enjoyed some notable upside recently, surging more than 30% over the last week.
Billionaire’s Bullish Prediction
As for why the digital currency has risen to fresh, all-time highs as of late, more than one media outlet pointed to billionaire investor Mike Novogratz’s recent prediction that ether finish 2017 close to $500.
He stated on Bloomberg Television that digital currencies are in the second or third inning, which could easily be interpreted as meaning that these innovative assets could experience significant upside going forward.
Another significant development that has coincided with the rising price of ether is the sharp increase in initial coin offerings (ICOs).
Entrepreneurs have raised $2.8 billion this year through ICOs, according to Funderbeam data reported on by Hacked. This figure represents a more than 1,000% increase from the $228 million these token sales raised last year.
Many ICOs rely on Ether, Bitcoin or both, requiring investors to exchange these larger, more established cryptocurrencies for the digital tokens being offered through these sales.
As a result, demand for ether has skyrocketed, helping drive the digital asset’s price higher.
Ether’s price has done very well lately, but the digital currency could encounter some serious headwinds if there is any truth behind the concerns that digital currencies have entered a bubble.
Some have likened the sharp returns experienced by cryptocurrencies to the tech boom of the 1990s.
If these concerns materialize, and the robust demand for these digital assets suffers a sharp drop, it could drive down Ether prices in more than one way.
First of all, it could trigger a sharp sell-off, prompting investors to flee the digital currency.
Second, these market participants might become far more reluctant to put their money toward ICOs, reducing this activity significantly and undermining a key source of demand for Ether.
These two headwinds could result in sharp losses for the digital asset.
Disclosure: I own some Bitcoin and Ether.
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