Good news for the digital currency market, raising cryptocurrency to a record high
Ethereum jumps to a record high after the release of a report on the European Investment Bank's digital bond issuance
Investing.com - ETH / USD, the world's second-largest cryptocurrency by market value, hit a new high on Wednesday, as participants cited media reports of the European Investment Bank's plans to launch a "digital bond" sale on the Ethereum blockchain network.
Ether is the digital currency or token that facilitates transactions on the Ethereum blockchain in the crypto world, and the terms Ether and Ethereum have become interchangeable.
Bloomberg said on Tuesday, citing unidentified sources, that the EIB plans to issue digital bonds worth € 100 million for a period of two years, with the sale being led by Goldman Sachs (NYSE: GS) and Santander Bank (Stock Exchange of Spain). : SAN) and SUST GENERAL (OTC Trading: SCGLY), according to analysts.
Ether hit a record high of $ 2,713.95 on Wednesday, after rising more than 5% the day before. The latest rise was 1.4%, at $ 2,706.39.
Danny Kim, head of revenue at SFOX, a full-service crypto broker, said reports about the issuance of digital bonds by the EIB "have sparked a case of upward institutional use of Ethereum".
He also indicated that the supply of Ethereum in the market decreased, which led to an increase in its price.
"The amount of Ethereum on the exchanges continues to decline, and it had reached its lowest level in the past year," Kim said. "With less supply on the stock exchange, the likelihood of a large sell-off decreases."
Demand for Ether has also risen as investors use tokens to purchase works of art or virtual lands, in the form of non-exchangeable tokens, on platforms like SuperRare and Decentraland.
On Monday, cryptocurrencies got a boost as a result of reports that JPMorgan Chase (NYSE: JPM) plans to introduce a managed Bitcoin fund, the latest indication that what many see as a speculative investment is gaining institutional legitimacy.
Bitcoin, the world's largest cryptocurrency asset with more than $ 1 trillion market capitalization, regained the $ 50,000 level this week. Bitcoin also last rose 1% at $ 55,630.82, but was well below its high of $ 64,895.22 on April 14th.
On March 1, Goldman Sachs restarted the cryptocurrency trading desk, just weeks after Tesla (NASDAQ: TSLA) announced its purchase of $ 1.5 billion of bitcoin, driving the currency's price higher.
However, cryptocurrencies met some resistance after US President Joe Biden unveiled plans to increase capital gains taxes, a move that could limit investment in digital assets.