UPDATE 2-Ethereum jumps to record high on report of EIB digital bond issuance

UPDATE 2-Ethereum jumps to record high on report of EIB digital bond issuance

(Recasts, adds details, bylines, datelines, analyst comment)

By Kevin Buckland, Stephen Culp and Gertrude Chavez-Dreyfuss

NEW YORK/TOKYO, April 27 (Reuters) - Ethereum, the world’s second largest cryptocurrency in terms of market capitalization, rose to an all-time peak on Tuesday, with market participants citing media reports about 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, the terms ether and ethereum have become interchangeable.

Bloomberg reported on Tuesday, citing unnamed sources, that the EIB plans to issue a two-year 100-million euro digital bond, with the sale to be led by Goldman Sachs, Banco Santander, and Societe Generale, according to analysts.

Ether hit a record high of $2,683.65 and was last up 4.00% at $2,636.12.

Danny Kim, head of revenue at SFOX, a full-service crypto broker, said reports on an EIB digital bond issuance has “triggered a bullish institutional use case for ethereum.”

He also cited the decline in supply of ethereum in the market, which has jacked up its price.

“The amount of ethereum sitting on exchanges continues to drop lower and has been the lowest in the past year,” Kim said. “With less supply on exchange available, there’s less likely a chance of a major sell-off. "

On Monday, digital currencies got a boost from reports that JPMorgan Chase is planning to offer a managed bitcoin fund, the latest indication that what is considered by many a speculative investment is gaining institutional legitimacy.

Bitcoin, the world’s biggest crypto asset with more than $1 trillion in market capitalization, regained the $50,000 mark this week. Bitcoin, was last up 1.83% at $55,060.31 but still more than 15% below its record high at $64,895.22 set on April 14.

On March 1 Goldman Sachs restarted its cryptocurrency trading desk, just weeks after Tesla Inc announced it had purchased $1.5 billion in bitcoin, sparking a rally.

But cryptos hit some resistance after U.S. President Joe Biden unveiled plans to raise capital gains taxes, a move which could curb investment in the digital assets. (Reporting by Kevin Buckland in Tokyo, Stephen Culp and Gertrude Chavez-Dreyfuss in New York; Editing by Aurora Ellis)

Goldman Sachs Group (GS) - Ethereum Hits New ATH As European Investment Bank Issues Two-Year Digital Bond On ETH Blockchain

What Happened: Ethereum reached a new all-time high of $2,675 on Tuesday, gaining nearly 10% overnight and pushing its market cap past $307 billion.

Just as the second-largest cryptocurrency set a new price record, the European Investment Bank (EIB) announced plans to offer a two-year digital bond on the Ethereum blockchain.

According to Bloomberg, EIB plans to price 100 million euros ($121 million) of two-year notes in an inaugural sale of these digital bonds. The notes will reportedly be registered on the public Ethereum blockchain network using distributed ledger technology and will be priced on Tuesday.

EIB has also mandated Goldman Sachs Group Inc (NYSE:GS), Banco Santander SA (BME: SA), and Societe Generale SA (EPA: GLE) as the joint-lead managers for its inaugural sale.

Why It Matters: This isn’t the first time the Ethereum blockchain has been used in the process of issuing a bond. In April 2019, Societe Generale SFH issued 100 million euros of covered bonds as a security token on the Ethereum blockchain.

“This live transaction explores a more efficient process for bond issuances. It proposes a new standard for issuances and secondary market bond trading and reduces cost and the number of intermediaries.”, stated the bank in a press release.

With the European Union’s investment arm issuing debt on Ethereum, market proponents viewed the development as a bullish catalyst for the network.

In the eyes of the Ethereum community, including global macro investor Raoul Pal, the move was an acknowledgment of Ethereum as a legitimate financial infrastructure.

Polygon Price Climbs to Record High, Benefiting From Ethereum Congestion

Helium, a technology that uses blockchains and tokens to incentivize consumers and small businesses to run commercial telecommunications hubs, is launching a 5G version of its network.

Announced Tuesday, Helium is partnering with FreedomFi, a kind of do-it-yourself tech package for building 5G networks, so that participants can be paid to support the rollout of next-generation wireless networks, effectively by building their own mini cellular towers.

“What Helium has so far done with telecoms in the wireless space is almost like Airbnb enabling people to monetize their real estate in the form of a mini hotel,” Helium CEO Amir Haleem said in an interview. “Via our partnership with FreedomFi, we’ve learned there’s an enormous opportunity to build a 5G LTE network where every house can basically have a miniature cell tower that carriers can use to offload traffic anytime they’re near it.”

Related: Polygon Price Climbs to Record High, Benefiting From Ethereum Congestion

Blockchain-based decentralized economies have widened the gateway into industries in a way that can reward swarms of previously-uninvited participants, while also improving the fabric of such networks for the incumbents that operate on them.

Helium may be rare among Web 3 projects in that it’s attracted quite a few users.

The firm’s peer-to-peer internet of things (IoT) sensors – which are used for applications like keeping tabs on e-bikes, scooters or smart pet-collars – have gone from zero hotspots in 2019 to almost 30,000 today, with some 200,000 more already paid for and in the pipeline, according to Haleem.

Helium history

Founded in 2013 and backed to the tune of $53 million by the likes of Union Square Ventures and Multicoin Capital, Helium has seen strong growth since first releasing its low power “LongFi” hardware-based nodes and mining units in Austin, Texas, a couple of years back.

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Read more: Crypto-Powered IoT Networks Are on Their Way to Over 250 US Cities

The Helium FreedomFi combination will use Citizens Broadband Radio Service, or CBRS (not to be confused with Citizens Band radio made popular by truckers), a spectrum authorized by the U.S. Federal Communications Commission (FCC) in January 2020, to allow wireless carriers to deploy 5G mobile networks without having to acquire special licenses.

Helium and FreedomFi highlight a new use case for CBRS, one that delivers on the initiative’s promise of innovation and creativity, former FCC Commissioner Michael O’Rielly said in a statement.

“Turning consumer gateways into network distribution tools and merging with ultra-hot cryptocurrency – consistent with the companies’ plans – may just be the step needed to help supercharge private 5G deployment,” O’Rielly said. “Now we get to see if the market agrees.”

HNT meets 5G

While people tend to think of 5G as delivering faster video streaming or making virtual reality more immersive, the biggest benefit relates to how its software-centric architecture will reduce operating expenses and ultimately help billions of people in emerging economies get connected.

“That might well be the biggest opportunity,” said FreedomFi CEO Boris Renski, adding:

“In the U.S. we are looking at carrier offload to make the networks bigger and better. But in the developing world, where there is no wireless network, you could imagine a whole universe of entrepreneurs that start their own wireless network businesses using this as the foundation and the technology.”

FreedomFi Gateways are now available for pre-order and are expected to ship in the third quarter of 2021.

Helium’s native token, HNT, is up 6,845% over the past year, according to CoinGecko, and is currently trading at $16.44.

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