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Ethereum price hits record high above $4,600 as rally continues

CryptocurrencyNov 03, 2021 11:54
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© Reuters

By Samuel Indyk

Investing.com – The price of Ethereum rocketed to a new all-time high above $4,600 on Wednesday morning as the rally in most major cryptocurrencies has continued. The second-largest cryptocurrency now has a market cap of just under $550 billion.

Calls for Ethereum Rally

One of the latest catalysts for the rally in Ethereum was a recent note out from Goldman Sachs (NYSE:GS). The US investment bank said that there is potential for Ethereum to hit $8,000 by the end of the year.

Bernhard Rzymelka, Goldman’s Managing Director of Global Markets, noted that crypto assets have traded broadly in line with inflation breakevens since 2019. Rzymelka says that if inflationary pressures persist, then this could be supportive for Ethereum as it has tracked inflation markets particularly closely, “likely reflecting the pro-cyclical nature as a ‘network based’ asset”.

“The market has started to press against the all-time high with a narrowing wedge: Either a sign of exhaustion and peaking … or a starting point of an accelerating rally upon a break higher,” Rzymelka said. The suggestion is that if the historical correlation persists then Ethereum could surge towards $8,000.

CME Micro Ether Futures

Another supportive factor for Ethereum is news that the CME is set to launch Micro Ethereum futures.

In a note posted on its website, the CME said Micro Ether futures would launch on 6th December.

“Since the launch of Ether futures in February, we have seen steady growth in liquidity in these contracts, especially among institutional traders,” said CME Global Head of Equity Index and Alternative Investment Products Tim McCourt. “At the same time, the price of Ether has more than doubled since these contracts were introduced, creating demand for a micro-sized contract to make this market even more accessible to a broader range of participants.”

Micro Ether futures will join CME’s growing number of cryptocurrency-related derivatives, including Micro Bitcoin Futures and Ethereum futures.

The new contract will be cash-settled, based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of ether.

Ethereum price hits record high above $4,600 as rally continues
 

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