ETH/USD is at a life high above $2750.00 on April 29, 2021. It has surged more than 30% after the EIB bond sale plans, similar to the surge in August 2018.
Ethereum Moves to Life High above $2,759 Levels
Ethereum, the second-largest cryptocurrency in terms of market valuation has touched new highs on Thursday. Reports say that the European Investment Bank has plans to launch its euro digital bond sale using the Ethereum blockchain network.
The EIB has plans to issue a $121 million digital bond sale. Though cryptocurrency usage is surging from big institutions, its usage as a digital bond sale is not very common. The EIB intends to issue 2-year 100 million digital bonds. Ethereum rallied more than 5% in a single day on the news of the EIB sale plans. Ether value has gone up by 30% in just seven days.
Ethereum 2.0 was launched in 2020 and has great potential for further upside. It is more secure and allows for several thousand more transactions for every second on its Blockchain.
Ethereum rallied 3.6% and 4.2% for the past two weeks, though it saw slid mildly in between. It crossed major resistance at $2,600 on April 26. The psychological level at $2,700 was crossed on April 27 and continues its uptrend to trade at life highs on April 29. ETH/USD started the year 2021 at $800 and has gone up more than three times within a short span of four months.
Increasing Institutional Interest Causing Surge in Ether Prices
Large investors are showing interest in the second-largest cryptocurrency, Ethereum. Trading volume has surged in April, as large companies like Tesla and Visa are s are using the crypto market for trade. Â Payment and sale can be made through crypto transactions, say big companies.
The EIBâ€™s digital bond sale will be led by Banco Santander, Goldman Sachs, and Societe Generale, say sources. It shows that institutions are interested in using Ethereum.
Another institution that has plans to offer a managed bitcoin fund is JPMorgan Chase. Vonovia is a German-based company that issues its first registered digital bond, which was â‚¬20 million at the beginning of this year. Telefonica is another German company that used Blockchain technology to raise a loan amount of â‚¬200 million early this year.
Ether works on a Blockchain smart contract platform that automatically executes everything necessary for the agreement between the parties on the internet. It does away with intermediaries between contractors and removes transaction costs. Ether has gained in value as digital money due to its uniqueness for global payments too.
Demand for Ether Causes Shortage and Increased Prices
There is a shortage in the number of Ethereum reserves on exchanges, and it may be another reason for the hike in value, say experts. The reduction in the supply of ether is the catalyst for the surge in ether prices. There is less supply in the exchanges, and the reserve in exchanges has been lowest in 2020. Further, ETH 2.0 deposit contract has locked in another 4 million ETH.
The demand for ether has also surged as artists are buying virtual art or land using non-fungible tokens on platforms like Decentraland and SuperRare. The demand from artists and creators is increasing, which is creating scarcity. Creators are making use of ether to earn online. Through NFT, a unique code is provided to users, which resembles an ownership certificate to the user over the digital asset, which encourages artists to move into the crypto usage.
Ethereum is the second-largest cryptocurrency in terms of market valuation of around $305 billion. Vitalik Buterin,is the founder of Ethereum.
Bug Discovered on Prysm
On April 24, a bug was discovered in Prysm, a software client of Ethereum 2.0 was affected by a bug. On Saturday, validators were unable to earn rewards on the Ethereum network.
Bitcoin dropped sharply after touching a record high at the $64,890 levels reached on April 14. News that capital gain taxes are to be issued in the United States to curb digital asset investments has hit bitcoin, the worldâ€™s largest currency, pulling the cryptocurrency lower than the critical $50,000 level. However, it has recovered to around $54,000 again on Thursday.
Rippleâ€™s XRP also surged to life highs on April 14 to $1.9600 levels. However, it moved lower to 1.0320 on April 25, in the same manner as Bitcoin.
Litecoin hit a life high of $310 on April 16 and moved lower to $220.00 on April 25.
Most cryptocurrencies have moved in tandem to Bitcoin, though ethereum continues to move to life-highs after the news of the EIB plans.
Investors have to be cautious in their investments as they are speculative and volatile. Cryptocurrency is susceptible to fraud and does not have sufficient government regulations. It is best for cryptocurrency users to invest what they can afford to lose.