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Cryptocurrency ethereum breaks $4,000 mark as it hits record high

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Photo by: STRF/STAR MAX/IPx 2021 4/29/21 Ethereum hits a record high.
Ethereum has long been in the shadow of bitcoin but the token's gains over the last few month have outpaced it significantly. Photo: Getty

Ethereum (ETH-USD), the second largest cryptocurrency, broke the symbolic $4,000 (£2,836) hurdle on Monday morning in London, extending a rally that began to gather pace over the weekend. 

By 11.30am in London the token was trading 5.9% higher, hitting $4,097 — bringing its total market value to around $450bn. 

Meanwhile, bitcoin (BTC-USD), the most popular cryptocurrency, saw a more subdued rise of 0.6%. 

Ethereum has long been in the shadow of bitcoin but the token's gains over the last few month have outpaced it significantly, rising more than 250% since January. 

The breakout rise has been pegged to the growing number of developers building decentralised finance or "DeFi" applications on its blockchain platform, as well as a growing institutional interest in crypto as a market.

Watch: What is bitcoin?

"There is strong evidence that traders and investors are actually liquidating small positions in bitcoin and putting that money in ethereum as they believe that this coin is still massively undervalued," said Naeem Aslam, chief market analyst at Avatrade.

"There is no doubt that ethereum is going to touch the 5K price level, a price target that we talked about several times before. The long-term price target for Ethereum is still at 10K."

Aslam added that some investors missed the opportunity to buy into bitcoin before its meteoric rise, which could be spurring on the price rally. 

Read more: Elon Musk SpaceX Dogecoin tweet fails to spur price

Other analysts were more sceptical of the bump.  

"The meteoric rise in cryptocurrencies has a whiff of deja vu," said Ben Onatibia, head of markets at Vanda Securities. "In 2017, bitcoin had made all the headlines and been the best performing crypto asset for months. 

"When the rally started to look tired in November, investors rotated to lesser known altcoins like ripple and ethereum, which quickly became household names too. Ripple peaked on January 8th while ethereum held onto its gains for another week or two. 

"In the months that followed, cryptocurrencies cratered as retail investors rushed to the exit."

Read more: Bitcoin, ethereum and the blockchain technology behind decentralised finance

Ethereum's rise comes alongside a rocky few days for the meme-inspired dogecoin (DOGE-USD). 

A tweet from Elon Musk saying that his SpaceX company would accept dogecoin to fund a lunar mission next year failed to spur the price of the cryptocurrency.

Dogecoin, which had been rallying last week as internet users tried to push the value of the coin to $1 (£0.70), was lower on the day, down 1.1% to $0.53.

The Tesla (TSLA) owner said that the satellite, dubbed Doge-1, would be the first-ever crypto in space and the “first meme in space.”

Watch: What are the risks of investing in cryptocurrencies?

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