It's the Cryptokitties' fault. (See also: Cryptokitties Rule Traffic On Ethereum's Blockchain.)
Ethereum, the world’s second most popular cryptocurrency, surged by 31.53% in the last 24 hours to set a new record of $623.07 this morning. At 15:04 UTC, it was trading at $625.16, an increase of 31% in the last 24 hours.
To date, the cryptocurrency’s price is up by a remarkable 14,500% from the start of 2017. Ethereum's market capitalization has jumped to $60.3 billion from $722 million in January 2017. (See also: Is It Possible That Ethereum Is Not A Bubble?)
Why Did the Price Spike?
There are a couple of reasons for Ethereum’s outstanding price trajectory this year.
First, investors are enthused about the number of use cases for ethereum’s smart contracts. Throughout the year, there has been growing awareness about such contracts enabling transactions involving ether.
From banks to gaming platforms, numerous established institutions are testing ethereum’s smart contracts to offer or innovate services. The cryptocurrency’s price benefits from ether’s network effects.
Today’s surge might also have to do with the fact that the ethereum network recorded its highest number of transactions yesterday.
Second, Asian investors have played a critical role in propping up and enabling a surge in ethereum’s price. South Korea has been anointed an “ethereum powerhouse” and has emerged as the world’s second-largest market for the cryptocurrency.
In fact, Bithumb, an exchange based in South Korea, witnessed the biggest trading volume in the cryptocurrency in the last 24 hours, and the Korean won is the most-traded exchange currency currently.
Will Ethereum's Price Continue To Rise?
Ethereum was created from the original cryptocurrency’s blockchain after a hack last year. Ethereum Classic, the original cryptocurrency, has a market capitalization of $3 billion and is the world’s 11th most-traded cryptocurrency. As it has gained popularity, however, the cryptocurrency has been targeted by hackers.
An increase in transaction volumes on ethereum's blockchain could also result in a corresponding jump in transaction costs. In response, developers have renewed calls for a hard fork in ethereum to ensure greater security. (See also: $150 Million+ Ether Stolen, May Need Hard Fork.)
A hard fork could result in a further increase in the cryptocurrency's price. (See also: Ethereum's Price Increases After Hard Fork Implementation.)