• Ether hit a new record above $4,600 on Wednesday, driven by enthusiasm over ether futures and the metaverse.

• The Chicago Mercantile Exchange said on Tuesday micro ether futures would start trading December 6.

• Facebook has announced plans to create a metaverse, while exchange Binance this week backed a rival start-up.

• Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Ethereum's ether token shot to a new record high on Wednesday, driven by a burst of buying after the world's largest derivatives exchange said it would launch a new futures contract, and as momentum continued to build around metaverses that could likely be built on its network.

The coin climbed by as much as 7.5% to a high of $4,642 early on Wednesday, bringing gains over the last seven days to around 18.5%. It is second to bitcoin in terms of market capitalization, with a value of around $544 billion.

"Ethereum's rally has most likely been driven by the Chicago Mercantile Exchange's announcement of micro ether futures," said Eliézer Ndinga, research lead from 21Shares, an exchange traded product provider.

The Chicago Mercantile Exchange announced on Tuesday it will launch a micro ether futures contract that will start trading on December 6. The CME already offers an ether futures contract backed by 50 ether that launched in February this year. The micro futures will be backed by 1/10 of an ether, according to the exchange.

"Smaller-sized futures contracts will broaden access to cash-settled ether futures to an extensive array of professional investors and raise awareness of ethereum as an asset class," Ndinga said.

Another factor propelling the coin is the momentum in the metaverse space, a virtual gaming reality that allows players to use avatars or unique non-fungible token characters to take part in challenges to win crypto tokens.

The various existing metaverses are hosted on the ethereum network thanks to its ability to run various decentralized finance applications, as well as other peer-to-peer protocols. Ndinga said 68% of the DeFi market is on the ethereum network.

"Virtual-reality applications have been in the spotlight as investors seek alternatives to Facebook," he said.

Ethereum-based metaverse gaming platform Sandbox said it had raised $93 million in a funding round on Tuesday. Likewise, Decentraland where players can build, own and monetize their virtual experience has become a major player in the space. Both platforms host 22% of the virtual reality global market, Ndinga said.

Facebook has said it plans to gain a foothold in the metaverse and last week said it would change its parent company name to Meta as a sign of its commitment to its virtual reality plans. Binance, an exchange, also said Tuesday it would invest in the metaverse.

Read the original article on Business Insider