Ethereum, the second largest cryptocurrency in terms of market valuation, has seen significant gains this week compared to the rest of the cryptocurrencies in the ecosystem. Its new rebound coincides with the publication of a report on the plans of the European Investment Bank (EIB) to launch a sale of digital bonds, precisely on the public Ethereum blockchain.
The inaugural sale of the EIB’s ‘blockchain bonds’ It will consist of 100 million euros ($ 120 million) of two-year notes. The negotiations will be supervised by Goldman Sachs, Banco Santander and Société Generale, Bloomberg reported on Tuesday, April 27, citing unconfirmed sources.
After the news spread, the price of ether (ETH), the cryptocurrency of Ethereum, reached a new all-time high of $ 2,700 this Wednesday, April 28, with an increase of more than 3% in relation to the price registered the previous day, according to data from CoinMarketCap.
While the price of most cryptocurrencies has fallen during the week, ETH prices recovered much faster than most.
Ethereum price hits new all-time highs while attracting institutional investors. Source: CoinMarketCap.
Although it arouses new interest, the issuance of “blockchain bonds” is not something new, because as CriptoNoticias reported, in mid-2019, the French bank Societe Generale issued the first bond created as a regulated token on the Ethereum blockchain. . The bond was issued through Societe Generale SFH, a company associated with the corporation. Later, at the end of that same year, Banco Santander settled a bond in Ethereum, obtaining a profit of USD 99,000.
At the time Santander issued the bond in September of that year, it used an Ethereum token, which another company in the group bought with a series of ERC-20 tokens, which represented the cash used to complete the investment, and which were kept in an escrow account.
JP Morgan also sets its sights on Ethereum
Institutional investment in the cryptocurrency market appears to be gaining legitimacy as banks have set their sights on bitcoin and ETH. Until recently, crypto assets have been viewed by many traditional investors as a speculative investment, however a new twist may be taking place.
In fact, there are indications that JP Morgan is also turning its attention to Ethereum, according to a report published Tuesday. In an excerpt from the document shared by the founder of The Block, Mike Dudas, analysts at the financial institution ask the question, Why does ETH outperform ?, then suggest that the fluctuation of the price of this cryptocurrency does not depend on the derivatives market demand, as is the case with bitcoin.
Both the BTC and ETH markets experienced comparable liquidity shocks earlier this month, leading to comparable deleveraging of their respective derivatives markets in the following days.
JPMorgan analyst report.
According to the JP Morgan analysts, also observed better liquidity conditions in ETH futures than BTC futures. Additionally, they point to the continued growth of decentralized finance (DeFi) and other components of the Ethereum-based economy, suggesting some considerable advantages when it comes to investing in ETH versus bitcoin.