After Bitcoin, institutions are finally turning to Ethereum

The central theses

  • Open interest in CME’s Ethereum Futures has grown steadily since it launched on February 8th.
  • In this sense, the number of whales in the network has also increased.
  • The increasing buying pressure could help ETH to catch up on Bitcoin’s bull run.

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While many private investors have been pushed out of the market due to the high volatility, the institutional demand for Ethereum is increasing.

Institutional demand at a record high

Ethereum’s scalability issues have drawn many investors and developers in recent years. However, the London fork planned for July seems to be attracting a lot of attention.

In addition to the meme “Ultra Sound Money”Institutional demand for Ethereum also appears to be increasing.

# Ethereum’s monetary policy is a commitment to reduce the issuance of ETH supplies to the minimum necessary to secure the network.

Few understand that.

– antiprosynthesis.eth @ (@antiprosynth) June 18, 2020

Since CME launched its Ether Futures on February 8th, open interest and daily volume have grown steadily. Data from Skew shows that the total number of outstanding contracts on the world’s largest financial derivatives exchange is $ 357 million, while trading volume rose to $ 680 million on April 22nd.

CME Ethereum Futures from Skew

According to Arcane Research, the surge in institutional demand is related to the London hard fork and a new Ethereum-based financial product launched in Canada.

“The growing open interest and trading volume matches the approval of 4 Canadian Ether ETFs last week when Purpose Investments, CI Global Asset Management, Evolve and 3iQ launched their ETFs.” said the cryptocurrency research firm.

Ethereum whales on a shopping spree

On-chain data shows a similar one increase asked for Ethereum from larger owners. Ether’s supply distribution chart shows that the number of addresses with 10,000 to 1,000,000 ETH has increased 5.22% in the past two weeks.

Since then, around 57 whales have joined the network.

The growing number of major investors supporting Etherum may seem insignificant at first glance. When you consider these whales hold between $ 27 billion and $ 2.7 billion in ETH, the sudden surge in buy orders is significant.

Distribution of the Ethereum offer by SantimentDistribution of the Ethereum offer by Santiment

The rise Buying pressure Behind Ethereum was significant enough to push prices to a new all-time high of $ 2,740 correlation with Bitcoin to a multi-year low of -0.18.

As long as Ether continues to rise while BTC falls, there is a high probability that more institutions will turn to this altcoin and help raise prices even further.

Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.

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