By Samuel Indyk
Investing.com – The price of Ethereum hit a new record high on Monday morning, breaching $4,700 for the first time, following a weekend surge in major cryptocurrencies. The total market capitalisation of all cryptocurrencies is approaching $3 trillion.
DeFi rally
The rally in Ethereum comes amid a surge in interest for networks with decentralised finance (DeFi) applications and smart contracts. A boom in interest of non-fungible tokens (NFTs) and the size of the potential market is also supporting Ethereum and other coins with similar functionality, including Solana and Cardano.
Sports associations such as the NBA in the US have already seized the opportunity and sell highlights as NFTs, while the English Premier League is reportedly considering offering a similar product to NBA’s TopShot.
A 15% rally in the last week has seen Solana become the fourth largest cryptocurrency by market cap, although the price is marginally lower on Monday morning.
Bitcoin jumps
Bitcoin had been relatively steady after a small correction in the wake of the launch of the first Bitcoin Futures ETF last month. The launch of the ProShares Bitcoin Strategy ETF (NYSE:BITO) coincided with the all-time high hit last month before the price of Bitcoin declined back towards $60,000.
However, a surge this morning and over the weekend has put the record high back in focus with some analysts suggesting that fears over higher inflation continues to support cryptocurrency prices.
"The recent surge in the crypto asset partly seems to have been caused by investors piling in, seeing it as a hedge against inflation," writes Hargreaves Lansdown (LON:HRGV) Senior Investment and Markets Analyst Susannah Streeter. "Some appear to have been enticed by the argument that the huge monetary stimulus programmes unleashed by central banks is fuelling inflation which will see the value of money decrease over time, whereas Bitcoin has a fixed limit on the number of coins which can be created."
Meme coins
The rally in meme-based coins has also helped the total crypto market cap jump towards $3 trillion. Earlier this year, Dogecoin surged higher and now has a market cap of almost $40 billion. Today, the coin is trading higher by over 8%.
Another dog-based coin, Shiba Inu, had an 800% rally in October to take its market cap up towards $40 billion. However, a decline last week caused by a ‘whale’ moving coins to various wallets led to a correction as some speculate the holder may want to realise some profits from the holdings.