The value of Ethereum, the second largest crypto in capitalization after Bitcoin, continues to move up and down following recent statements by Fidelity, the well-known US multinational fund management company.
In the last few hours, Fidelity Digital Assets said it will offer Ethereum trading for its institutional clients starting on 28 October. The news arrives following a note sent by the investment company.
After all, Fidelity had already been keen on making crypto available for its institutional clients, and this move is the latest step toward making the plans a reality.
In detail, Fidelity had already launched a new Ethereum Index Fund for accredited investors. It seems that, so far, the asset management company had already raised $5 million in its Ethereum Index Fund since the start of sales dating back to September 26.
Ethereum’s value and variations
Launched in 2014, Ether is the native cryptocurrency of the Ethereum blockchain. It is commonly known as Ethereum, Ether, or ETH.
The current price of Ethereum is €1,320.53. It appears that the price has varied by -€4.771084 in the last 24 hours with a trading volume of €8,783,277,462.
Specifically, the highest price recorded by Ethereum was €4228.93. On the other hand, the lowest price recorded by ETH is €0.38.
The overall history of Ethereum’s value corresponds to what analysts call a boom-and-bust cycle. In other words, a pattern in which a period of growing excitement leads to a surge that lasts until investors cash out their profits. Hence, consequently, the value collapses.
The pattern just described is a cyclical pattern, so it tends to repeat itself, and the current value of Ethereum depends on its position within it.
Ether prices rise and fall in the days before fork events in which new features or news are introduced, as in the case of Fidelity’s statements.
Thus, the value continues to rise and fall based on how well the new features meet users’ needs and make Ethereum more or less valuable as an investment, store of value, and application platform.
All these factors influence the exchange rate of Ethereum.
Generally, the success experienced by Ether as a high-value crypto has, almost paradoxically, become a factor limiting its growth. In fact, all distributed applications hosted on Ethereum share a total bandwidth of 30 blockchain transactions per second.
Developers of dApps use sharding techniques and Ethereum side-chains to get around this limitation, but the execution bottleneck remains a significant factor in the growing popularity of alternative blockchains.
Fidelity about crypto and the Ethereum Index Fund
Fidelity launched its cryptocurrency-focused institutional custody and trading platform Fidelity Digital Assets in 2018. Currently, the company offers two crypto exchange-traded funds dedicated to the metaverse and digital payments, respectively.
In particular, following the multinational company’s latest statements, its institutional clients will be able to buy, sell and transfer Ether, according to the note.
As previously anticipated, Fidelity had already launched its Ethereum Index Fund in September. Specifically, it is a fund that invests directly in ETH, which in turn are securely stored using Fidelity’s in-house storage services.
It also turns out to be an eligible fund for registered accounts, including RRSPs and TFSAs. Thus, it allows for exposure to ETH with a fully regulated product.
This is because ETH is not a regulated financial product per se. As a result, investors who are forced by law to invest only in regulated products find it difficult to buy it directly.
The solution is instruments such as ETFs, which allow anyone to make investments on regulated financial products, but in doing so also give them the opportunity to take positions on unregulated assets.
Returning to Ether, we know that the Fidelity Ethereum Index Fund is available only to accredited investors and will track the performance of the Fidelity Ethereum Index PR benchmark through passive, direct ownership of Ether.
The new Ethereum fund is the second launched by Fidelity Digital Assets’ digital asset management business, following the 2020 launch of the Wise Origin Bitcoin Index Fund I.
Ethereum and its value: its beginnings and history
Ethereum was created in 2013 by Vitalik Buterin. The man is a Russian-born developer who grew up in Canada and combined expertise as a programmer and researcher in the cryptocurrency field.
Buterin relied on a crowdfunding operation in 2014 and was in a position to launch Ethereum the following year when it became public and accessible online.
The project was born and developed as a public Blockchain in the form of an open-source distributed computing platform designed to make available the ability to create, publish and manage smart contracts in a peer-to-peer mode.
Thus, it is possible to say that Ethereum is a platform for “Distributed Computing” with the Ethereum Virtual Machine (EVM) as one of its main components.
In other words, Ethereum is a computational platform that is “remunerated” through transactions involving a cryptocurrency called Ether. The platform can be adopted by anyone who wishes to join the Network.
This will provide a solution that allows all participants to have an immutable and shared repository of all transactions implemented over time. At the same time, it is designed so that it cannot be stopped, blocked or censored.
Indeed, Ethereum is designed to be adaptable and flexible and to easily create new applications. In short, Ethereum is a Programmable Blockchain that not only provides pre-defined and standardized “operations,” but allows users to create their own “operations.”
It is effectively a Blockchain platform that enables different types of decentralized Blockchain applications not necessarily limited to cryptocurrencies alone.
Ether, on the other hand, is a token that is treated as a cryptocurrency with the ticker symbol of ETC. Ether has a de facto dual role: on the one hand, it is itself the processing power needed to produce the contracts, and on the other hand, it represents the cryptocurrency that allows people to “pay” for the realization of the contracts.