Coinbase annual review shows growing institutional interest in Ethereum

An annual report from Coinbase shows a marked increase in business interest in Ethereum.

These investors flock to ETH because they believe in the potential value of the network and its inflation hedge.

The on-chain data corroborates this story because it shows an increase in the exits of Ethereum addresses from exchanges.

An annual report from Coinbase shows a steady increase in interest in Bitcoin Loophole among institutional investors.

The main reason for this growing positive sentiment for Ethereum is that investors see it as a safe haven to preserve their wealth.

Why this sudden interest in Ethereum?

2020 is the year that crypto saw the highest level of interest from institutional investors. According to the Coinbase report from January 22, 2021, these institutional buyers aren’t just buying bitcoin . They see Ethereum as a digital commodity that can support other transactions within its ecosystem.

Bitcoin retains its position as the most purchased digital asset by institutional investors. There was also a significant acceleration in the number of short positions for the second largest cryptocurrency on Coinbase.

ETH versus other assets in 2020: Cryptodata

Ethereum’s price has exceeded that of most assets, as it saw an astonishing 487% increase last year. Since then, ETH has advanced further, almost doubling its all-time high. The price is currently around $ 1,315 at the time of going to press.

There appears to be a confluence of fundamentals for Ethereum for several reasons. These factors speak for a strong value proposition, which a large part of the market may not yet have captured.

Upgrading the network to ETH 2.0 resulted in the staking of many ETHs. This explains the supply shock that already occurs when available ETH leaves exchanges.

Coinbase, which has emerged as a major broker for institutional buyers, is not immune to this supply shortage .

On-chain data on Coinbase confirms idea

Data from on-chain on CryptoQuant indicates that the number of email addresses transacting from Coinbase wallets has increased dramatically in recent months. The largest withdrawals were recorded on January 1. At that time, Ethereum’s price was around $ 729.

Ethereum withdrawals from Coinbase: CryptoQuant

This activity took place six days after the launch of ETH 2.0 on the mainnet and is the largest since the start of 2020. The launch required stakers to hold a minimum of 32 ethers, which explains the peak transfer from Coinbase.

Grayscale is one of the largest institutional investors who has shown interest in Ethereum. This corroborates the Coinbase report since Grayscale has stored a significant amount of ethereum in its stash.

Prior to December 9, the date of the announcement, Grayscale Ethereum Trust’s holdings stood at $ 1.64 billion. An additional 105,000 eth, valued at $ 58.5 million, saw its portfolio climb to around $ 1.7 billion.