On Wednesday, Ethereum, the world’s second-largest cryptocurrency in terms of market capitalization, touched a new peak, with funders citing media reports about the European Investment Bank’s plans to launch a “digital bond” sale on the Ethereum blockchain network.
Ether is the digital currency, or coin, that enables transactions on the Ethereum blockchain. In the crypto world, the terms “ether” and “ethereum” are almost identical.
Bloomberg reported on Tuesday, citing unnamed sources, that the EIB plans to issue a two-year 100-million-euro digital bond, with the sale to be led by Goldman Sachs, Banco Santander, and Societe Generale.
Following a more than 5% rally the day before, ether hit a record high of $2,713.95 (€2,249.60) on Wednesday. It was last trading up 1.4% at $2,706.39 (€2,242.34).
Danny Kim, a full-service crypto broker and the head of revenue at SFOX, said reports on an EIB digital bond issuance have “triggered a bullish institutional use case for Ethereum.”
He also cited the decline in supply of Ethereum in the market, which has led to a hike in price.
“The amount of Ethereum sitting on exchanges continues to decrease and has been the lowest in the past year,” Kim said. “With less supply on the exchange available, there’s less of a chance of a major sell-off.”
Ether Demands Regulated by NFT
The quantum of Ether has also climbed as investors use the coins to buy virtual art or land. This can be in the form of non-fungible tokens (NFTs) on platforms such as SuperRare and Decentraland.
On Monday, digital currencies were raised. Alongside this, JPMorgan Chase is planning to offer a managed Bitcoin fund, the latest indication that what is considered by many to be a speculative investment will gain institutional legitimacy.
This week, Bitcoin, the world’s biggest crypto asset with more than $1 trillion (€828.5 trillion) in market capitalization, regained the $50,000 (€41,427) mark. Bitcoin was last up 1% at $55,630.82 (€46,092), but still well below its April 14 high of $64,895.22 (€53,772.37).
On March 1st, Goldman Sachs restarted its cryptocurrency trading desk, just weeks after Tesla Inc. announced it had purchased $1.5 billion (€1.2 billion) in Bitcoin, triggering a rally.
But cryptos hit some resistance after US President Joe Biden unveiled plans to raise capital gains taxes, a move that could restrain investment in digital assets.
