- Ethereum is the next ideal stop for institutional investors once they finish with Bitcoin.
- ETH’s record new high is not comparable to BTC.
- The spike in ETH price is a result of the DeFi sector growth.
Aya on speaking with Business Insider mentioned that the ETH network already has recognized infrastructure support for the institution’s entry. More so, she adds that the constant upgrades on the network would likely show huge interest from institutions.
They’ve just started understanding: what are the payment rails, the on and off-ramps, the custody solutions, how do we make sure everything is compliant with our trading partners, who are the trading partners. And they just finished that with bitcoin. Now doing that with ethereum.
In addition, ETH’s record new high is not comparable to BTC. Because BTC has shown a huge upsurge to institutional investors. According to CoinGecko, the BTC and ETH price is at $49,481 and $3,845 respectively, at the time of writing.
Institutions Impact on Ethereum Price
An entry of institutions into the Ethereum marketplace will make the price surge further. Similarly, the adoption of bitcoin by institutions has seen the asset show a rally hitting an all-time high price of $64,800 on April 14, 2021.
After Ethereum’s record price of $4,358 on May 5, 2021, Aya notes that the asset is also providing an increase in capital inflow. Even more, she highlighted that trading on the Chicago Mercantile Exchange (CME) is offering investments of up to $10,000 on options contracts for ETH.
Notably, the spike in ETH price is a result of the growth in the DeFi sector, since most projects run on the ETH network. More so, the sector’s total locked value is nearly $50 billion, and Kantrovich projects will potentially hit $100 million by the end of 2021.
Furthermore, the Decentralized Finance (DeFi) sector takes on the roles of the traditional finance system, institutions like banks. However, Aya explained that banks are already making inroads to include different aspects of the DeFi sector to avoid becoming obsolete.