Cryptocurrency ether broke past US$4 000 on Monday, climbing to a new peak for a third session in a row on bets it may find new uses, lifting other digital currencies in its wake.

Bitcoin hit a three-week high and one-time parody currency dogecoin steadied, arresting a sharp drop after comments from Tesla chief Elon Musk sent it tumbling on Sunday.

Ether, traded using the Ethereum blockchain, was last up around 6% for the day on the Binance exchange where it hit $4 119 around midday in Asia. Bitcoin rose to $59 603 and dogecoin steadied around $0.54.

Bitcoin has doubled, ether has soared more than five-fold this year and dogecoin more than a hundred-fold as a euphoric mood has spilled over from bitcoin into other crypto assets.

“I think crypto has got a lot more institutional involvement than people who haven’t followed the market believe,” said Chris Weston, head of research at brokerage Pepperstone, pointing to sizeable weekend liquidity.

‘Not a meme joke coin’

“And everyone’s been in ethereum. It’s not a meme joke coin, it actually has some application use,” he added, referring to its role in the rise of non-bank facilitated transactions.

The Ethereum blockchain has been recently upgraded, which traders think might make it a central player in a trend called “DeFi” or decentralised finance, where digital platforms chip away at banks’ dominance of financial transactions.

The sum of ether tokens in circulation is $477-billion, according to CoinMarketCap, compared to $1.1-trillion for bitcoin and $69-billion for dogecoin.

Trade in dogecoin, launched as a joke currency with a dog mascot, has concerned analysts as it is mostly impossible to spend and gains are being driven by a speculative frenzy.

It fell by a third in Sunday trade after Musk, a crypto investor, described it as a “hustle” during a television appearance, but it seemed to find support after he tweeted that his SpaceX rocket company would accept it as payment.

“You really couldn’t make this stuff up,” Rabobank senior macro strategist Michael Every wrote in a note to clients. “This is not so amusing for an SEC already flagging it will act on crypto, and watching Saturday trading… Forget about space, this is a dog eat doge world in the end.” — Reported by Tom Westbrook and Stanley White, (c) 2021 Reuters