Ether climbs almost to 1,750 US dollars, but transaction fees dangerously high
The Ether price hits the next record high, but transaction fees are also soaring to record highs, dampening sentiment.
Market-leading altcoin Ether (ETH) extended its new record high on 5 February, climbing even closer to the psychologically important US$2,000 mark.
Ether record run already almost at US$1,750
As data from Cointelegraph Markets and TradingView shows, the ETH/USD currency pair made its next strong bounce today (Friday).
At press time, the Ether price is targeting the US$1,750 mark with a gain of 6.5%, bringing the total weekly gain to almost 22%.
The fresh upswing is partly due to increased interest in Decentralised Financial Services (DeFi), as many projects from Italian Formlua this division are based on the Ethereum blockchain. Many DeFi cryptocurrencies are among the clear winners this week.
Ether, meanwhile, also has its own reason to rejoice, as ether futures are now being traded on the CME Group’s major options exchange. The influential crypto asset management firm Grayscale also stepped up purchases of ETH for its own Ether investment fund again this week, after taking a break for a fortnight.
Transaction fees dangerously high
However, while some prominent industry figures such as Gemini co-founder Tyler Winklevoss are celebrating the record run of the second largest cryptocurrency, the Ethereum blockchain’s transaction fees are also soaring to record highs.
This is less encouraging, however, because as Cointelegraph reported this week, some crypto exchanges have had to temporarily suspend trading ETH as a result.
„This is a real crisis. We can go ahead and grab our popcorn because it will be exciting to see how Ethereum manoeuvres its way out of this mess,“ as one Blockstream developer assessed.
According to data from Ycharts, average ETH transaction fees were $23.27 as of yesterday, 4 February.
Bitcoin (BTC), meanwhile, remains below the US$40,000 mark, with mixed fortunes as while the stock market hit a record high of its own today with the S&P 500, the US dollar index has fallen, which in turn should play into Bitcoin’s favour.
„Correlation does not mean there is necessarily an effect relationship, but the trend is clear: #Bitcoin’s record run (and temporary downturns) show a strong correlation to movements in the US dollar index (DXY),“ as crypto analysts at Kaiko explain.