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Investors see Ethereum as a store of value

A growing number of institutional investors are buying Ethereum, which they see as a store of value. Ethereum’s native cryptocurrency and second most important in market capitalization after Bitcoin, is experiencing a historic momentum in its appreciation.

It should be noted that recently, this digital currency reached a new all-time high for its price. This fact makes it an investment opportunity for large investors and a new reserve asset option in the cryptocurrency market.

Last week, the second largest of the cryptocurrencies, reached the figure of $ 1,439 per coin. Currently, the price is very close to US $ 1,300, which is still a considerably high price. The Ethereum rally is the most important since 2018.

Why do institutional investors see Ethereum as a haven?

One of the reasons why investors see Ethereum as a store of value may be Bitcoin’s pullback. It should be noted that the pioneering cryptocurrency dropped from a top near $ 42,000 to $ 31,000 in a very short time. This encouraged many capitals to seek alternatives within the crypto system itself.

In Coinbase’s annual report, this exchange company claims to have noticed a growing number of Ethereum purchases. That is, an increasingly large number of institutional investors have been taking positions in this digital currency, taking advantage of its large returns. An important aspect is that most of these investors have already opened positions in Bitcoin.

Thus, confidence grows in this asset market, which encourages bettors to jump from one cryptocurrency to another. On other occasions, the weakness of Bitcoin scared investors away from the crypto environment towards other more traditional assets.

Simply put, in the digital gold narrative, the monopoly of Bitcoin is shared with this other currency. For this reason, large investors, while looking for Bitcoin, also do the same with Ethereum, which they see as an easily accessible option.

Currently, large investors see Ethereum as a safe haven, partly thanks to the strength of its valuation.  Source: TradingViewCurrently, large investors see Ethereum as a safe haven, partly thanks to the strength of its valuation.  Source: TradingViewCurrently, large investors see Ethereum as a safe haven, partly thanks to the strength of its valuation.  Source: TradingViewCurrently, large investors see Ethereum as a safe haven, partly thanks to the strength of its valuation. Source: TradingView

Decentralized Finance also plays its part

Another reason that could give Ethereum a big boost from this rally and growing adoption is Decentralized Finance (DeFi). Experts like Arthur Cheong of DeFiance Capital explained in the CoinDesk medium that the most daring investors do not settle for Bitcoin.

“I think the more adventurous institutions are exploring Ethereum and DeFi, after looking at Bitcoin,” he said. This could validate the thesis that Bitcoin is the ‘Internet of money’, while Ethereum, as investors see it, could be considered the ‘Internet of value’.

The latter is due to the multiple options offered by DeFi in matters of finance, as well as the facilities to enter them. It should be remembered that, unlike the traditional financial system, with thousands of obstacles, to operate in the DeFi you simply require access to the Internet.

In that sense, investors, once they enter ETH, will be caught in great opportunities for return. Beyond the native Ethereum currency, they will have before them the entire ecosystem of Decentralized Finance. It is a matter of time for crypto to gain more prominence in the investment arena of professionals.

Data to take into consideration

According to data from Coinbase and Gemini, investors see Ethereum as a source of juicy returns. This is evidenced by the increasing adoption of the second cryptocurrency in market capitalization. It should be remembered that Ethereum is the queen of altcoins. In capitalization it is only surpassed by Bitcoin. Decentralized Finance or DeFi, give ETH a plus advantage when it comes to attracting investors looking for good returns.

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