Ethereum is gaining favor over bitcoin in the eyes of institutional investors. The price of the latter has been seen as being too high, prompting investors to look for other crypto investment options to gain exposure from. The expanding real-world use cases of Ethereum have also helped to further its case as the preferred crypto investment for institutional investors.
The growth of decentralized finance (DeFi) serves as a convincing argument that Ethereum provides better investment options than bitcoin does. And it would seem that institutional investors believe this also. CryptoCompare released its Data Asset Management Review for September, which confirmed that institutional investors were indeed moving out of bitcoin for a more favorable position on Ethereum.
The CryptoCompare report for September revealed some interesting figures regarding assets under management for both bitcoin and Ethereum. September was a brutal month for both cryptocurrencies with brutal dips and crashes that left both digital assets struggling in the market. But while institutional investors had moved out of bitcoin amid declining prices, Ethereum had seen renewed interest from big money.
Assets under management for bitcoin had fallen 7.8% in the month of September. Bringing the total amount of bitcoin assets under management to $35.1 billion. This is the lowest that bitcoin AUM had ever been in a five-month period. After AUM had been on a steady rise with the peak of the bitcoin market in May.
In contrast to bitcoin’s decline, Ethereum-based products had seen an increase in big money flowing into them. The asset recorded its highest market share yet of total assets under management for crypto at 25.9%. The CryptoCompare report also revealed that Grayscale’s Ethereum Trust (ETHE) had been the most traded digital asset product for the month as daily volumes had jumped 29%.
ETH price holds strong above $3,400 | Source: ETHUSD on TradingView.com
Staying On Top Of The Game
Ethereum has been taking market share from bitcoin at a steady pace. Over the past couple of months, various reports have shown that ETH is becoming a preferred digital investment. A NewsBTC report showed that ETH Futures basis had overtaken bitcoin futures only six months after its launch. And showed a more bullish trend than that of BTC, trading at a higher rolling basis than the top cryptocurrency in the market.
A JPMorgan report from top analysts had revealed that institutional investors were leaving behind their bitcoin investments for Ethereum. In the note, the analysts had explained that this declining interest in bitcoin futures had to do with the fact that big money was moving more into ETH. Pointing out BTC futures had been consistently trading below market price. Meanwhile, ETH futures have been range 1% above market price.
Although crypto assets under management have been on the decline with regulatory and crackdown issues in the space, the past couple of weeks have seen positive inflows in the market. This represents that there is a turn in the tide and institutional investors are getting back into the game.
Featured image from CNBC, chart from TradingView.com