By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – Ethereum, the second largest cryptocurrency in terms of market capitalization and volume, hit a record high on Thursday, lifted by growing institutional interest in the space, and more than a week after its futures were launched on the Chicago Mercantile Exchange.

The virtual currency reached an all-time peak of $1,938 and was last up 4.6% at $1,936.94.

The CME last week launched futures on ether, the digital currency or token that facilitates transactions on the ethereum blockchain. In the crypto world, the terms ether and ethereum have become interchangeable.

Increasing institutional participation in cryptocurrencies also propelled bitcoin, the largest and most popular crypto asset, to an all-time peak of $52,640 on Wednesday.

“Ethereum is really undervalued, and I believe it has been … due to its more complex narrative,” said Luis Cuende, co-founder of Aragon, a decentralized application on the ethereum blockchain.

“A global computing network for Web3 (internet 3.0) is extremely exciting and new. I would say over the next three months, we could see ethereum hit $2,500.”

Bitcoin, on the other hand, is currently in consolidation mode after hitting a record high. It was last down 0.3% at $52,000. Among the mainstream investors and companies that have recently jumped on bitcoin’s bandwagon were Tesla, Mastercard, and BNY Mellon.

Jeffrey Gundlach, the billionaire chief executive of investment firm DoubleLine Capital, is the latest of the traditional investors who seemed to have a change of heart on bitcoin. He said in a tweet on Thursday that bitcoin may be the stimulus asset, not gold, adding that “lots of liquid poured into a funnel creates a torrent.”

Last month, Gundlach said he was neutral on bitcoin due to its volatility, which was a downgrade of his outlook from overweight.

Another beneficiary of bitcoin’s climb as a mainstream asset was the surge in trading volume for Purpose Bitcoin ETF, the world’s first bitcoin exchange traded fund, which was approved by Canadian regulators. Purpose started trading on Thursday.

More than C$80 million of Purpose were traded in the first few hours after its launch. By comparison, volume for the Bitcoin Fund, a closed-end investment fund, was about C$30 million.

CME data, meanwhile, showed nearly 1,900 ETH futures contracts were traded for the first five days after last week’s launch or about 92,800 ether, equivalent to roughly $160 million.

Around 27% of volume came from outside the United States and more than 33% traded during non-U.S. trading hours.

(1 U.S. dollar = C$1.2698)

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Fergal Smith in Toronto; Editing by Steve Orlofsky)