Ethereum’s ether cryptocurrency came within a hair’s breadth of a new record high on Tuesday, amid expectations the recent GameStop (GME) trading saga would accelerate the adoption of cryptocurrencies and decentralized finance (DeFi).
The second-largest cryptocurrency by market value climbed to $1,457 during the European hours, less than $3 below the lifetime high of $1,459.93 reached last month, according to CoinDesk 20 data.
The latest leg higher from $1,200 came alongside turmoil in the stock markets, where brokerage platforms like Robinhood have restricted transactions to rein volatility fueled by Reddit-based retail traders’ coordinated buying in stocks such as GameStop. The retail frenzy prompted by Reddit forum r/WallStreetBets forced hedge funds to unwind short bets in GameStop, leading to a 1,700% price rally in the 17 days to Jan. 28.
Crypto analysts believe the restrictive actions could bring more users into the DeFi space, which is dominated by Ethereum’s blockchain.
“With investment and trading platform Robinhood halting trading of certain assets like GameStop and Nokia (NOK), and Nasdaq President and CEO Adena Friedman calling for regulations to prevent retail investors from coordinating on social media, the case for cryptocurrencies only grows stronger,” Nicholas Pelecanos, head of trading at NEM Group, told CoinDesk.
According to Messari’s Ryan Selkis, the door for mass adoption of bitcoin, ethereum, DeFi and Web 3.0 assets has been flung open. “Buy ethereum to secure the fledging decentralized financial system and potentially make a lot of money, but also to tell your bank to f**k off,” Selkis noted in Thursday’s daily market brief.
Also read: What Does GameStop Mean for Cryptocurrencies?
Ether also has a store-of-value appeal, and a growing number of institutions have taken positions in the cryptocurrency, according to Coinbase’s recently released 2020 annual review.
While ether is eyeing a new lifetime high, bitcoin is down at least $7,000 from its record price of $41,962 reached on Jan. 8. Bitcoin is up nearly 20% this year, while ether has added more than 25%.