In 2020, when Bitcoin attracted institutional investors, it led to a massive amount of money pushed into the investment. The high-net-worth individuals and companies changed things for Bitcoin last year, as the asset went from $3,000 around the pandemic time to around $20,000 before the year ended. Experts attributed the sudden surge to the increased demand and institutional monies.
The community predicted that Ethereum could be the next asset to get institutional adoption since Bitcoin’s adoption in 2020. In January, the prediction could become a reality with Ether seeing new investors and surging continuously for the past weeks. Although the digital asset faced price corrections alongside other altcoins some weeks ago, it finally undergoes recovery and recently crossed the $1,300 range.
Institutional investors drive Ether rally
Based on recent statistics, Ethereum’s new surges could be due to institutional investor’s presence. Coinbase released a review in 2020, which revealed how investors used the asset as a store of value. According to the trading platform, it explained that institutional interest was brewing for the digital asset.
Investors believe that with Ether, they would record higher returns than with Bitcoin. It’s safe to note that while those investors purchased a large Ethereum holding, Bitcoin was still their primary attraction. The exchange seems resolute with its assertion when it opined that investors were using Ether as a store of value.
Coinbase revealed that there are two dominant bases why investors own Ethereum. The first is that asset is an efficient and suitable value store, while the other is because the Ethereum network is a dominant part of the crypto industry.
Major exchanges promote Ethereum, introducing it to most of their clients to expand the asset’s reach. Apart from Ether, another part of the blockchain industry, DeFi is finally gaining some solid ground. The blockchain platform incredibly increased its investors, from 2019’s to 2020’s $23 billion in market cap.
CME’s ether future might lead to institutional attraction
The Chicago Mercantile Exchange (CME) revealed last year that it would work on making Ether available for clients, especially with the asset’s growing demand. The firm already has BTC futures, and its ETH addition could mean that the latter is finally attracting deep pockets. Institutional investors can indirectly get exposure to ETH when the firm finally launches its futures next month. Some opine that the launch would suppress premiums on Grayscale’s platform.
It is clear that Ethereum investors are now bullish, thereby increasing asset prices with scarcity and other factors, but experts claim that the recent rallies could be internally driven. Chad Steinglass, an executive at an exchange, explained that Ethereum’s rally is organic and significantly driven from within the industry.
He continued by adding that Bitcoin’s bullish momentum was losing steam, hence the Ether’s interest change. Bitcoin presently records some outflows, which means that these large investors might be putting money into other digital assets, including Ethereum. The Ethereum platform revealed staking, which guarantees investors’ interest if they hold their investments for a period. This factor attracted other people who knew that they would get interests in their holdings.