Ether trading volume surged 1,400% in first half as institutions took exposure: Coinbase
|The ether (ETH, +3.09%) market was almost three times busier than bitcoin (BTC, +6.75%) in the first six months of the year as large investors diversified into the native token of Ethereum’s blockchain, according to crypto exchange Coinbase’s half-yearly review published on Monday.
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Ether's trading volume totaled $1.4 trillion in the January-to-June period, a 1,461% rise from $92 billion observed in first-half 2020.
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Trading volumes in bitcoin, the biggest cryptocurrency, rose 489% to $2.1 trillion during the same period.
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Ether also outshone bitcoin, the S&P 500 and gold in price performance, rallying 210% over the six months ended June 30. Bitcoin rose 20%, the S&P 500 gained 14% and gold fell 6.7%.
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"Many of our largest institutional clients, including hedge funds, endowments, and corporates, increased or added first-time exposure to ETH in H1, believing the asset has long-term staying power tantamount to BTC's, while playing a differentiated role in their portfolios," Coinbase's report said.
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The report cited the explosive growth of Ethereum-based decentralized finance (DeFi), optimism that Ethereum's transition to a proof-of-stake mechanism will turn ether into a yielding asset and the deflationary impact of the EIP-1559 upgrade as reasons for ether's price rally.
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The Ethereum Improvement Proposal (EIP)-1559 upgrade scheduled for Aug. 4 will activate a mechanism to take a variable amount of ETH out of circulation each time a transaction is executed. That will curb supply growth and may give ether a store-of-value-like appeal.
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