Last week, the cryptocurrency ethereum hit a record value of $250.41. That's over 30 times higher than its trading price at the start of the year, which was just $8 as of January 1st. An alternative to bitcoin, ethereum runs on ethereum bitcoin.

The ethereum bitcoin system went live in the summer of 2015 with just under 12 million coins premiering for crowd sale. Today, a main use of the cryptocurrency is smart contracts. These essentially are deterministic exchange mechanisms that allow for a direct transfer of value between two untrusted agents.

So, what's driving this current surge in price? Analysts say that a growing interest in cryptocurrencies and digital assets along with increased trading volumes in Asia are the two key factors driving up the price.

Growing interest in digital assets

Overall, interest in digital assets and cryptocurrencies has been growing, and ethereum is no exception. This is, in part, a result of increased support from mainstream financial and technological communities. For example, the Enterprise Ethereum Alliance (EEA) has been working to connect mainstream companies like Microsoft and JP to different technology vendors, which would enable them to do work on projects using block chain technology (the technology behind cryptocurrencies). JPMorgan specifically has already been working on implementing the ethereum-based systems that it has developed in order to facilitate fund transfers between the various global branches of the bank.

It's not just institutional lenders that are taking note of cryptocurrencies; with the rise of the initial coin offering, or ICO, individual investors are also taking note. Recently, ICOs have successfully raised tens of millions. This has only helped to fuel investor interest. And because many of these recent ICOs have made use of ethereum bitcoin, it has only helped to further drive up the price.

Governments also appear to be taking interest in cryptocurrency, particularly ethereum. It was reported that Vitalik Buterin, the creator of Ethereum, recently had a meeting with Russian President Vladimir Putin to discuss how the cryptocurrency might be used in Russia. If governments continue to take an interest in cryptocurrencies like ethereum, begin to recognize them as valid currencies, and take steps to regulate their use, then it is likely we can expect prices to continue to increase.

Increased trading in Asia

Moreover, ethereum has seen higher trading volumes in Asia, particularly South Korea. In fact, it has been reported that roughly 38 percent of all trading volume is occurring in South Korea.

"All major Asian exchanges, including ours, are currently overwhelmed by the sudden growth in our client base and trading activity," Aurelien Menant, the founder and CEO of Gatecoin, a Hong Kong-based regulated bitcoin and ethereum exchange recently told CNBC.¹ "Specifically, requests for more ether trading pairs seems to be a common theme."

It remains unclear whether we can expect to see sustained levels of ethereum price increases. However, we shouldn't expect the bubble to burst anytime soon. Right now investors are driven to diversify their cryptocurrency portfolios. Add to that the speculators who can basically get rich over night with a number of cryptocurrencies.

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1) CNBC. Ethereum hits another record high, marking a more than 2,800% rally this year
http://www.cnbc.com/2017/06/05/ethereum-price-hits-record-high.html