Institutional investors are getting into Ethereum

In addition to Bitcoin, Ethereum is increasingly becoming established as a popular asset class among professional investors. The “Big” to realize the value storage function of the second largest crypto-currency.

The crypto-investor base has become increasingly diverse over the past few years. Deflected in the first years the investors has changed, mostly small to change the fortunes of the crypto-market, the latest in the last year, fundamentally. Primarily, Bitcoin could benefit from the fact that institutional investors and with them the “Big Money” values the market of digital assets is increasingly infiltrate. However, in the wind shadow of the largest crypto-currency, in particular, Ethereum moves in the favor of big investors more and more to the front.

The result of the on 22. January published Annual report the crypto-exchange Coinbase. The Report of the investment strategies institution to spread institutional customers in the year 2020, and gives an in-depth insight into the development of the DeFi-market, as well as crypto-relevant regulations. In terms of Ethereum, the most remarkable Thesis is that the second largest crypto-currency is increasingly being used as a Store of Value, i.e. as a store of Value.

Ethereum-Performance overtakes Bitcoin

The grant to Ethereum can be explained solely against the Background of the value development. In a direct comparison the year calculated yield of Ethereum itself the Bitcoin in the shadows. While Ethereum has a one-Year increase of 487 percent, Bitcoin is risen “only” to 321 percent. The market capitalisation has risen in 2020 by more than 500 percent, from 14 to 85 billion dollars and the market dominance of 8 to 16 percent.

It is no wonder that “a growing number of (institutional clients) received positions in Ethereum”. The understanding of the network effects of Ethereum have changed fundamentally in recent years. Institutional investors have learned to understand, therefore, “the potential benefits of applications that are built on Ethereum”,. As a catalyst for the report, the 2020 booming development of decentralized Finance (DeFi).

The Argument for the possession of Ethereum, this is what we hear most often from our customers is a combination of i) its evolving potential as a store of value, and ii) its Status as a digital Good, which is required for transactions in the network.

The constant Ethereum-involvement in DeFi-applications is therefore abundantly clear in the increased Transaction throughput. As the chart below shows, the number of daily transactions since the beginning of 2020 significantly. As a result, the Ethereum network operates always on the edge of its Performance capabilities.

In addition, the report looks with reference to the rapid progress in the development of Ethereum 2.0 to the future with optimism and is the second largest crypto-currency attests to still auszuschöpf growth potential. Even if Ethereum 2.0 will probably be finished in a couple of years ago, the Staking-test-run but the first fruits.

Ether-Loss

Without that this is in the Report, large mention, the increased demand for Ethereum among big investors also means that the Ether-exchange reserves are constantly declining. How Glassnode holds, only been in the last week, over a Million Ether of the Exchanges removed.

The Ether sale is the Blockchain analysts after “a strong bullish Signal, since it indicates the level of confidence in the ability of ETH to growth in the near and longer future.” Overall, the indicators show a long-term, growth-friendly market environment, in the Ethereum still be untapped potential to improve play. If the big Upgrade is getting closer and the network to solve his scaling problem.