Ethereum hits new all-time high, bitcoin inches toward record as cryptocurrencies rally

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This illustration shows the Ethereum cryptocurrency represented in this photo taken in Sulkowice (Poland) on August 12, 2021. Jakub Porzycki/NurPhoto | Getty Images

The week is starting on a positive note for cryptocurrencies. Ethereum, the second-largest cryptocurrency in the world, surged more than 4% Monday to reach a new record high of $4,700. According to Coin Metrics data, the token was trading at $4,740 when it last traded. Bitcoin, however, rose 7% to $66,250, moving back towards the record of $66,900 set in October. It wasn't immediately clear why the move occurred. The volatility of cryptocurrencies is a hallmark, with price swings up to 20% more common than others.


This comes amid increasing excitement about DeFi (or decentralized finance), a new trend in crypto market that seeks to create financial applications such as lending on the blockchain. Ethereum is an important player in DeFi. The Ethereum network is home to some of the most important DeFi services, such as the decentralized exchange Uniswap or the lending platform Aave.

DeFi is still attracting regulators' attention, and experts warn that a crackdown on the company is imminent. Ethereum is also the backbone of many non-fungible tokens (or NFTs). NFTs can be described as digital receipts, which keep track of ownership for rare items such as online art. This year has seen an increase in activity, with one token sold at Christie's for $69 million. However, ethereum faces fierce competition. This year, rival tokens such as solana or cardano have seen a surge in their prices.

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