Ethereum, the second-biggest cryptocurrency in terms of market capitalization, reached a new all-time high on Wednesday after hitting $2,717.
ETH’s price is currently hovering above the $2,500 mark and shows no signs of going down.
Many believe that the coin’s massive gains from its price of $2,189 last April 26 were because of the European Investment Bank’s plan to launch a new digital bond sale via Ethereum’s blockchain network.
According to a report, the EIB is planning to issue a €100 million digital bond that will run for two years. This sale will then be led by Banco Santander, Goldman Sachs, and Societe Generale, which are three of the biggest financial firms that strongly support digital coins.
SFOX Revenue Chief Danny Kim said that plans to issue a new digital bond by the EIB ushered in a bullish trend for the crypto thanks to its improved functionality and increasing support from government-backed financial institutions.
Aside from that, Kim believed that the decreasing supply of Ether in the market is another reason why ETH’s price skyrocketed. Kim also said that the chances of having another major sell-off are lower because there are now fewer ETH coins available for trading.
Ethereum vs Bitcoin
Ethereum is currently the second-largest crypto. However, this is expected to change as major financial institutions like JP Morgan said that ETH is already outperforming BTC due to its improved liquidity and higher transaction rates in the Ethereum blockchain.
These were said after the coin reached a record high of $2,741, while Bitcoin struggled to get past the $55,000 checkpoint. Note that BTC is currently bearish as it is $10,000 below its all-time high of $63,200.
And aside from ETH’s improved liquidity due to higher turnover rates, the crypto is also becoming less dependent on Bitcoin’s price movements which is a good sign knowing that the latter is one of the most volatile cryptos to date.
Furthermore, eToro crypto analyst Simon Peters attributed Ethereum’s increasing price to the strong demand from major investors who are now diversifying their crypto assets.
New Opportunities Arise for Ethereum
Ethereum’s demand has risen considerably over the past year as the coin’s Non-Fungible Tokens (NFT) enables people to purchase land or virtual art using the coin.
Although such transactions can only be currently done on platforms like Decentraland and SuperRare, it is expected that more investors will create new systems that will accommodate ETH transactions.
Another example that shows the growing influence of cryptocurrencies is when JPMorgan Chase confirmed that they will create a regulated Bitcoin fund.
Many were quick to label this as one of the biggest developments in the industry as major financial institutions are now investing heavily on these once-speculative assets.
Even Tesla and Goldman Sachs dived into the trend as both global corporations confirmed their plans to incorporate digital coins into their systems.
Looking Into the Future
Ethereum’s developers have already laid out plans to further improve the coin’s security. One of which is by implementing new anonymity features that will mask the identity of the validator behind block proposals.
New technologies like the Verifiable Delay Function (VDF) will also improve the anonymity of validators and make it more difficult for hackers to disrupt transactions.