Ethereum, the second biggest cryptocurrency by market cap, broke to an all-time high on Wednesday.
According to CoinDesk data, the digital currency hit a record $1,417.38 at 5 a.m. UTC, before paring those gains. Ethereum has surged roughly 50 percent in a week and over 13,000 percent in the last year.
Strong buying support for Ethereum over the past week can be linked to a number of factors. It first started after the blockchain-based computing platform said in a blog post that fourth quarter transaction volumes on its network doubled, "surpassing 10 transactions per second for days at a time." That bullish update appears to have led some investors to view Ethereum as the premier digital coin, a point echoed by the simultaneous fall of some of its closest peers. (See also: Ethereum Co-founder Predicts Crypto Market Will See Crash Before Consolidation.)
While Ethereum rocketed on Wednesday, two of the other largest cryptocurrencies by market capitalization, bitcoin and Ripple's XRP, reported outflows.
Investors are impressed that many of the growing number of industry-wide initial coin offerings (ICO) were built using Ethereum’s versatile technology. They are also encouraged that large companies, such as Microsoft Corp. (MSFT) and JPMorgan Chase & Co. (JPM), are developing applications that use the Ethereum blockchain.
"Ether's price rally is a testament to the growing popularity of Ethereum as a platform for decentralized applications,” Thomas Glucksmann, head of APAC business development for cryptocurrency exchange Gatecoin, told CNBC in an email. “Over the last year and a half, we've seen that the majority of tokens issued during ICOs and traded on exchanges, have been coded to run on the Ethereum network.”
Steven Nerayoff, one of Ethereum’s co-creators, provided CNBC with a similarly bullish assessment. He said that the increasing number of projects built on the Ethereum blockchain could lead investors to pour more money into rival cryptocurrencies to bitcoin and expects this phenomenon to eventually help Ethereum to overtake its bigger rival.
Nerayoff predicted that the price of Ethereum could "easily" double or triple by the end of the year. (See also: How Did Ethereum’s Price Perform In 2017?)


Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.