Why are more and more institutional investors beginning to "include" Ethereum?
Ethereum, the second-largest cryptocurrency by market capitalization, is hitting new all-time highs these days, and the European Investment Bank issued good news about a $121 million digital bond, making demand even hotter.
According to a recent report by digital asset investment guidance provider Two Prime,With a thriving development community, a rapidly growing DeFi ecosystem, and the availability of a derivatives market, Ethereum has managed to attract the attention of institutional investors and corporate asset allocation.
Two Prime states, “Based on our analysis of ETH price performance, derivatives markets, and on-chain data, we believe Ethereum has earned a place alongside Bitcoin as an institutional-grade investment, store of value, and treasury reserve asset.” .”
Ethereum is currently priced around $2,900, up more than 900% in the past year.
Still, Two Prime believes that Ethereum is “significantly undervalued” compared to Bitcoin, which has a market capitalization of over $1 trillion.
On the other hand, Ethereum, which has attracted institutional investment since the beginning of 2021, has grown to a market cap of $275 billion, still only 25% of BTC.
Ethereum is an advantageous open-source technology development project with the power to shape the future of finance, and although Bitcoin remains the most popular crypto investment option, Ethereum is also becoming more and more popular.
Grayscale, the world's largest cryptoasset and cryptocurrency investment management company, owns 3.2 million ETH, accounting for about 3% of the total supply, which greatly reduces the total supply of ETH in circulation and causes its price to rise driving force.
Currently, our analysis using “out-of-the-money” (OOTM) put options in the crypto market as a hedge against long spot positions shows that institutional investors are penetrating the market.
Options volume (the number of contracts traded per day) and options open interest (the number of active contracts) also increased, further reflecting Ethereum’s growing institutional adoption.
Two Prime points out"Growth in the futures and options markets has outstripped purely retail speculative demand as institutional money managers have begun hedging long portfolios for very large volatility events."
On the other hand, since April 2021, more than 950k Ethereum has been transferred from world-renowned exchanges.
At the same time, the percentage of ETH in circulation now locked in DeFi protocols has increased from 8.5% to nearly 10%, which may signal the beginning of a supply shortage, this shortage may become apparent in the summer of 2021.
The original text comes from zycrypto, compiled and organized by Blockchain Knight, the English copyright belongs to the original author, please contact the editor for Chinese reprint.
The original text comes from zycrypto, compiled and organized by Blockchain Knight, the English copyright belongs to the original author, please contact the editor for Chinese reprint.
