Ethereum, the second largest cryptocurrency by market capitalisation will be used by the European Investment Bank (EIB) to launch a so-called ‘digital bond’ sale in an unprecedented nod of EU approval.
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Ether prices hit new all time highs on Wednesday ($2,720) potentially spurred on by the positive news from the European Investment bank.
While there are a range of factors propelling Ether’s price, Reuters attributed it to the European Investment Bank’s decision to launch a “digital bond” sale using the Ethereum network.
The EIB is issuing a two-year €100-million ($120.8 mn) digital bond, with the sale to be led by Goldman Sachs, Banco Santander and Societe Generale, according to Bloomberg analysts.
Interestingly enough, it was awarded a top triple-A rating by Moody’s and Fitch.
For several months, we’ve covered the institutional use-case for Ethereum, citing both financial non-financial applications for the network and recently compiled into one argumentative report.
ETH on exchanges dwindles
Meanwhile, the amount of ether siting on exchanges continues to drop lower, following a trend which started after the March 2020 market-wide crash. As supply dwindles – to be used in various decentralised financial (DeFi) applications, staking or hodling – the potential for a major sell-off on comparatively illiquid secondary markets is lower.
Additionally, the drop in token gas prices as a result of the Berlin upgrade also provides a bandwidth boost for the network as demand increases.
However, this update is still relatively inconsequential in comparison to the EIP-1559 upgrade scheduled for July, which is set to turn ether into a deflationary asset while considerably increasing network throughput.
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