Institutions Have Started Turning To Ether (ETH) says Coinbase Report
Ethereum has experienced a new surge of investment from financial institutions, according to a new report from Coinbase. This could have influenced the recent surge in Ether (ETH) price, which recently hit an all-time high.
Institutional Investors Turn More to Ethereum (ETH) Assets
Coinbase released its annual report analyzing the current development in the crypto space in the past 12 months. The exchange focused on the recent surge in the popularity of Ethereum (ETH) and gave some reasons for this.
On the one hand, the price of ETH was cited as a significant reason for the rise in interest. From January to December 2020, ETH rose by 487%, while Bitcoin posted an increase of 321%. As expected, this exponential increase has resulted in more media coverage for the altcoin culminating in a rise in popularity.
Another reason put forward by the report was the increasing interest in ETH by institutional investors in 2020. Ethereum is viewed by many as a crypto asset that has great potential for evolution in the future. Besides, Ether is seen as a digital commodity, which is necessary to make transactions work on the Ethereum network.
Coinbase report enthused that the entire architecture of Ethereum is proof of its strength for institutions. ‘’Today, most of our institutional clients see Ethereum as a decentralized computer network that shares the properties of Bitcoin as a store and transmitter of value without an intermediary’’.
DeFi a Driving Force for Ethereum
Coinbase also notes that this new craze is based on the decentralized finance (Defi) sector’s growth potential. This sector exploded in 2020 and is regarded as an important area of development for the Ethereum network’’.
The exchange also explained that the complexity of ETH as an asset might have held back institutional investors in the past. However, this is changing with more investors understanding the role of ETH in the Ethereum ecosystem. The report concludes that it expects ETH to become easier to understand for investors in the coming years. This influx could then take the price of ETH to new highs and reduce the gap with BTC.