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Bitcoin and Ether Eye Fresh Records as Investors Look for Inflation Protection

Ether surpasses $4,700 for the first time and bitcoin eyes a fresh record as investors continue to look to established cryptocurrencies for inflation protection.

Ether continued its record-setting rally on Monday, surpassing $4,700 for the first time as the cryptocurrency that runs on the Ethereum blockchain continued to both ride bitcoin’s coattails and attract retail and institutional interest amid inflation concerns.

Ether recently traded at $4,730.57, according to CoinDesk, up 3.2% after hitting $4,737 per one U.S. dollar on Sunday night. The world's second-biggest cryptocurrency has steadily notched a string of all-time highs over the past week and a half since surpassing $4,400 for the first time on Oct. 28.

Bitcoin, meantime, traded at $65,849.33, up 6.5% after briefly topping $66,000 overnight on Sunday with an eye to breaching its previous record of $66,975 reached on Oct. 20. 

Cryptocurrencies in general have continued to see strong demand as investors look to both capitalize on the value of digital tokens and, at the same time, use them as a potential hedge against rising prices of goods and services, which erode the value of fixed assets like bonds.

Analysts have pointed to falling real bond yields, a sign that inflation may be less transient than central bankers including Federal Reserve Chairman Jerome Powell believe, as reason behind the recent rise in bitcoin, ether and other cryptos.

Bitcoin is widely perceived as a store-of-value asset like gold that is immune to inflation, and while Powell reiterated last week that price pressures are likely transitory, fears of inflation running out of control continue to spook some investors.

Data from U.S. Department of Treasury Shows the 10-year real yield dipped to -1.09% on Friday, its lowest since Aug. 30. Reads on both producer and consumer prices will be released Tuesday and Wednesday, respectively.

As of Sunday night, ether’s market cap was still about half of bitcoin’s: $554.5 billion for ether vs. $1.226 trillion for bitcoin. 

On a percentage-gain basis, however, ether wins: Ether is up 31% over the past month, and has surged a whopping 535% so far this year. Bitcoin, by comparison, is up about 20% over the past month, and has soared more than 125% year to date.