Why More Institutional Traders Are Stacking Up Ethereum

From bitcoin to ethereum; it seems more institutional traders are now picking up interest in stacking up ethereum for long term gains. The reason being that ether also serves as a store of value.

Ethereum; A Better Store of Value?

Over the years, bitcoin had been the major store of value in the crypto space, with investors clinging to it as an edge against economic turmoil. However, institutional traders are now taking a keen interest in ethereum as well.

Coinbase’s annual review for 2020 noted that there’s a growing interest from institutional clients in ether. The reason for this is tied to how investors valued the Ethereum network.

For one, it’s the native currency of the network. Because ethereum has been a platform of choice, being the backbone of numerous valuable projects, ether will always be required to power transactions on the ethereum network.

“The case for owning ethereum [ether] we hear most frequently from our clients is a combination of, first, its evolving potential as a store of value and, second, its status as a digital commodity that is required to power transactions on its network,” the report says.

Coinbase, Gemini, Others, Bullish on Ether and DeFi

In a statement to Coindesk, Arthur Cheong, the founder, and portfolio manager at DeFi-focused crypto fund DeFinance Capital, expressed his opinion on institutional interest in ether and DeFi. In his words, he says;

“I think the more adventurous institutions are exploring ethereum and DeFi after they looked at bitcoin.”

According to data, Coinbase, Gemini, among others, are part of institutions that are incredibly bullish on Ethereum. Also, there’s an increasing number of large investors who explore different decentralized finance space.

However, as opined by Deniss Vinokourou, head of research at digital asset prime broker, Bequant;

“Not everyone is comfortable with the risks that are still associated with DeFi, but the hyper growth of these projects boosts activity on the Ethereum network and, thus, supports capital appreciation.”

ETH Staking; Another Reason They Love Ether

Unlike bitcoin, ether has many twists to it—a variety of ways to keep its investors, locking them in the long term.

After the release of ETH 2.0, Ethereum’s staking has added many benefits of going long on the crypto asset.

Source: Read Full Article