Ethereum (ETH) is the largest decentralised server in the world. You can create Smart Contract, dApp and even your own coins. The picture shows an Ethereum metal coin in front of a price graph.
Ethereum is one of the best performing crypto assets of the year to date, finally regaining strength after a brutal bear market in 2018 and 2019 and a temporary loss of over 90% compared to its all-time high.
An important catalyst for Ethereum’s recovery is the fact that institutions are buying huge amounts of the crypto currency, which is related to the fact that the Decentralised Finance (DeFi) sector has experienced a huge hype in recent months.
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Grayscale now holds 2% of all BTC and ETH
According to Barry Silbert, CEO of the Digital Currency Group, until recently, Grayscale’s Ethereum Trust quietly accumulated 2% of all ethers in circulation. Grayscale is a DCG-owned digital asset management company that now manages approximately $6 billion for institutional clients such as hedge funds and family offices. This is what Silbert writes on Twitter:
While everyone has focused on our Bitcoin accumulation, the @Grayscale Ethereum Trust now holds over 2% of all ETH
Extrapolated, 2% of all Ethereum’s funds in circulation are about 2.25 million ETH, currently worth over 800 million USD.
The above statement from Silbert comes after the company announced that it has accumulated $1.05 billion in deposits during the third quarter, a record for the company. Of this capital, $720 million was invested in Bitcoin alone. Grayscale is not the only institution to buy into Ethereum.
Institutions mainly buy ETH when they are interested in DeFi
The head of DTC Capital, Spencer Noon, says that the institutional interest in DeFi manifests itself primarily in investments in ETH and not in actual „yield farming“ operations or DeFi-Coins themselves:
My assessment of#DeFi, after talking to institutional investors, fund managers, OTC desks and FOs in recent weeks: The herd is coming. They are excited about DeFi, but new to it, so they buy $ETH first.
However, Noon believes that investors who are invested in Ethereum but have an Crypto Trader interest in DeFi will eventually „broaden the risk spectrum upwards“ once they are more familiar with the concepts and protocols of the industry.
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Ethereum is in a very good position
This mass ETH accumulation comes about because the fundamental trends of the crypto currency indicate that Ethereum has a bright future ahead of it.
Spencer Noon recently announced three key factors that show that Ethereum is stronger than ever from an on-chain and fundamental point of view. In particular, he pointed to the fees collected by the miners, the number of contract calls based on Ethereum and the number of daily active addresses:
L1 Health – Long-term fundamental indicators show that Ethereum has probably never been healthier. 1. ETH now outperforms BTC in total daily fees in USD 2. 115 million contract views in September, compared to 57 million in June 3. Daily Active Addr consistently over 400k.
CFTC Chairman Heath Tarbert also recently stated that he was really „impressed“ by Ethereum, „always“, he said. He added that if Bitcoin is like e-mail, then Ethereum can be seen as something similar to the Internet.