Institutions ditch Bitcoin for Ethereum as ETH becomes gateway to Web3
- Bitcoin’s large wallet investors are realizing profits.
- One address sold $81.4 million worth of Bitcoin at $54,300.
- Open interest in CME futures contracts in Ethereum exceeds that of Bitcoin with declining interest in BTC.
- The approval of a Bitcoin ETF is expected to be followed closely by an Ethereum ETF.
Institutional interest in DeFi is on the rise. MetaMask Institutional (MMI), the institutional arm of the Ethereum wallet MetaMask, has partnered with institutions to access DeFi protocols.
Institutions race for access to Web3 applications, prefer Ethereum over Bitcoin
The “flippening” narrative has been around for over a year now. With rising institutional interest in Ethereum, the narrative has become relevant again.
ConsenSys-owned Ethereum wallet MetaMask has 10 million monthly active users, and it has become the easiest way to access DeFi protocols. The wallet has now partnered with BitGo, Qredo and Cactus Custody, three institutional asset management firms.
The wallet first launched its institutional offering in December 2020. Since then, there has been a spike in interest in Ethereum and DeFi protocols from hedge fund managers and firms.
Bitcoin dominance is expected to rise after the launch of a Bitcoin ETF approval; however, proponents expect the spike to be temporary. Once an Ethereum ETF is launched, institutions may flock to the Web3 gateway.
The open interest in CME Ethereum futures, considered indicative of institutional investors’ interest in a cryptocurrency, is rising.
Layer-1 scaling solutions are becoming the global standard, according to cryptocurrency experts. On-chain activity, daily transaction volume and unique users are rising, as highly programmable money powers applications on Web3.
Cryptocurrency analyst and veteran entrepreneur @tokenstate recently commented on institutional interest in Ethereum.
L1s including ETH are becoming the global standard.
— Token State (TokΞnizΞ ThΞ World ΞIP-1559) (@tokenstate) September 30, 2021
Notice non-PoW chains are soon to be. Highly programmable money chains powering major applications.
Alongside the rise in interest in Ethereum, large wallet investors are reducing their exposure to Bitcoin. Bitcoin’s third-largest holder sold 1,500 BTC at $54,300. The large wallet investor has reduced his exposure to BTC since the asset’s price crossed $50,000.
This implies dropping interest in Bitcoin and capital rotation to Ethereum and Web3 ecosystem products is real.
FXStreet analysts have evaluated the Ethereum price trend and predicted that the altcoin is heading toward a strong bullish breakout.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
