UPDATE 1-Ethereum extends gains to rise 8%; bitcoin firms

(Updates prices, adds details)

LONDON, May 31 (Reuters) - Cryptocurrency Ethereum extended gains to rise more than 8% on Monday to $2,587 but remained 40% below a record high of above $4,300 hit earlier this month.

At 1153 GMT, it was trading up 7.4% at $2,565.69.

Larger rival Bitcoin also gained in its wake with the world's biggest and best-known cryptocurrency rising 3.7% to $36,977 in quiet trading with London and U.S. markets shut for holidays.

Bitcoin has been less volatile in recent days but is down by more than 35% this month, weighed by growing regulatory pressures on the sector.

Latest positioning data for the week ended May. 25 confirmed the trend with net short positions nearly doubling from the previous week, which was the smallest net short since late March last year.

In the latest salvo against the cryptocurrency, Bank of Japan Governor Haruhiko Kuroda said much of the trading was speculative. His remarks followed China's recent efforts to crack down on mining activities.

It is currently trading at levels last seen in February and at roughly half its peak value of $65,000 seen in April. (Reporting by Saikat Chatterjee; Editing by Yoruk Bahceli and Nick Macfie)