Ethereum hit a record high on Thursday as the world’s second-largest cryptocurrency, priced at $2.800, but then fell around $2.700.
The jump in Ethereum prices came after the European Investment Bank announced on Wednesday that it was issuing its first digital bond in the Ethereum blockchain, a development that led to the assessment that cryptocurrency is gaining the attention of financial institutions.
Ethereum pulled in most major cryptocurrencies, with the exception of Bitcoin, which lost $54.471, with the most popular cryptocurrency now moving 16% below its all-time high of $65.000 this month. However, for 2021 it has achieved an impressive rally of 90%, thanks to the growing interest from institutional investors and corporate buyers such as Tesla.
It is noted that other “altcoins“, or alternative currencies, have rallied this year, a fact that reduced the dominance of bitcoin in the cryptocurrency market below 50% last week for the first time since August 2018, according to CoinMarketCap.
The first time Bitcoin market share fell below this level was in 2017, before a huge drop in cryptocurrency prices. However, the “bulls” of Bitcoin argue that things are different this time, as the rally is driven by institutional demand and not by small investors.
“Bitcoin is almost a benchmark, the numeraire of cryptocurrencies. I think demand will continue as institutional investors gain more confidence in this market,” Carol Alexander, a professor at the University of Sussex, told CNBC last week.
However, there are sceptics who claim that Bitcoin and other cryptocurrencies are a “profit bubble”.