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Ethereum surpasses $4,000 to sets a new high

Princess Tarfa

The cryptocurrency ethereum broke $4,000 for the very first time on Monday, reaching a record high for the third day in a row on expectations that it would find new applications, while some experts believe it is overpriced at current market prices.

Ethereum, the second-largest coin by market capitalization, increased by more than 6% to just under $4,175, which was last up about 2%.

It has skyrocketed this year, propelled by hopes of increased adoption, thanks in part to its position in decentralized finance - “DeFi” - networks that enable crypto-denominated financing outside of conventional banking.

A forthcoming technological update to its software that is supposed to reduce its supply has also given a push while new retail players in the crypto market have warmed to it after a tepid quarter for bitcoin so far.

“(Crypto has) a good amount of systemic involvement than those who haven't witnessed the industry believe,” said Chris Weston, head of analysis at brokerage Pepperstone.

“And now everyone has been in ethereum. It's not a meme joke coin; it has some device use,” he said, pointing to its place in DeFi.

Even so, some critics claim that ethereum's rising value is not supported by evidence on how commonly it's being used. “The persistent deviation of its price relative to network operation raises value concerns,” JP Morgan experts stated in a client report dated May 7.

The number of active digital addresses in its database, for instance, will be more compatible with a value of about $1,000, according to the US bank.

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