Ethereum hits a new record high before falling away — while bitcoin and Ripple’s XRP continue to slide

• Ethereum breaks above $1,300 to hit a fresh all-time high on Wednesday.
• The second largest cryptocurrency by market capitalisation is defying its major rivals, which have slumped during morning trade.
• Both bitcoin and Ripple’s XRP are significantly lower on the day.

LONDON — Ethereum, the second biggest cryptocurrency in the markets, broke to a fresh all-time high overnight on Wednesday, before pulling back and falling into negative territory on the day.

Just after midnight UK time, ethereum’s price broke as high as $1,375, having only surpassed $1,000 during trade over the weekend. Ethereum has since slipped into negative territory, losing around 2.3% as of just before 10.00 a.m. GMT (5.00 a.m. ET) as the chart below illustrates:

Markets Insider

Ethereum’s recent rally first started after a fourth-quarter report on the performance of the currency — which is a decentralized network for people to run contracts on — showed that transaction volumes on its network doubled, according to a blog post, “surpassing 10 transactions per second for days at a time.”

Ethereum’s fall on the day coincides with drops for the two other largest cryptocurrencies by market capitalisation, bitcoin and Ripple’s XRP, both of which have seen falls on Wednesday. At 10.00 a.m. GMT, bitcoin is lower by around 4% to trade at $13,800.

XRP, which took even more of a hammering in early trade, has bounced back a little, but remains in the red, as the chart below illustrates:

Markets Insider

One possible reason for these falls is the announcement overnight that the Australian Tax Office (ATO) is establishing a taskforce to monitor cryptocurrency transactions.

According to our colleagues at Business Insider Australia, the taskforce “aims to ensure cryptocurrency investors are paying the correct amount of tax. A team of specialists across tax law, technology, banking and finance will devise strategies to follow the money on gains made from investment in digital currency.”

“We are consulting with key stakeholders who have expressed an interest in tax issues relating to cryptocurrencies,” a spokesman for the ATO said.

The falls could also be linked to a hangover from the news on Monday thatCoinMarketCap.com, arguably the most popular and important site for cryptocurrency pricing data, had opted to remove South Korean exchanges from its data sources.

That announcement caused a major sell-off at the time, and is likely still having some impact on the market.