Bitcoin is no longer considered internet money. With a massive influx of institutional structures over the past few months, its valuation has taken the next step forward, surpassing key price levels in 2021. The validation generated significant interest from these organizations, and its impact was evident from a broader financial perspective.
At the time of publication, Microstrategy holds 91,579 BTC in its bitcoin treasury, while Tesla holds about 43,200 BTC. Now the same wave of interest has poured into Ethereum. Having become more prevalent since early 2021, the interest became legitimate after the Chicago Mercantile Exchange or CME launched Ether futures for accredited US investors. It has become more convenient to accept directed bets on ETH and hedge against positions in the sports market.
Immediately thereafter, Galaxy Digital also announced the creation of the Galaxy Institutional Ethereum Fund on February 19 for institutional investors and businesses wishing to invest in Ethereum without buying or holding any assets.
Interest is also paid for ether, its value in 2021 will grow faster than that of bitcoins. Now that the two leading coins are receiving constructive interest from accredited investors, the question arises whether other assets have the opportunity to gain similar intrigue.
Why Bitcoin and Ethereum?
For the most avid crypto enthusiasts and traders, this question is self-explanatory, but it is necessary to cover the basics. Institutions may have only picked up the bitcoin mania in the past few months, but availability has been around since 2018. Shades of Gray started first with the GBTC Trust Fund, and the CBOE and CME are launching their BTC futures after a bull run in 2017. …
It was only logical that the face of cryptocurrency (i.e. bitcoin) received its first legal recognition from accredited traders. At the time of posting, Grayscale currently contains 654,885 BTC, which is 3.12% of the total supply.
As Bitcoin became the most popular crypto asset, interest in Ethereum began to grow in terms of development. 2020 has been defined by DeFi. The concept of NFT tokens has been buzzing lately, and for more context, here’s a diagram covering all projects on the Ethereum platform.
Hence, when institutions recognized the potential of ETH, it was well appreciated because its blockchain is helping projects worth over a billion dollars.
Together, Bitcoin and Ethereum account for over 60% of the total cryptocurrency market, with the remaining 7,000 coins accounting for less than 40%.
Could other altos generate the same institutional interest?
Perhaps they will, but not … at the same level.
Grayscale accredited investors already have the opportunity to invest in Bitcoin Cash, Litecoin, Ethereum Classic, Stellar Lumens, Horizen, and Zcash. The organization has also recently added new trusts for Basic Attention Token, Chainlink, Decentraland, Filecoin and Livpeer. However, these altcoins will not go to the next level due to the sheer volatility and time pressure in the industry.
For assets like Litecoin and Bitcoin Cash, the situation is slightly different, but they are fundamentally similar to Bitcoin, and over time, their trading volumes only followed trends rather than individually dominating the market.
Also, in the case of most other altcoins, they are already based on Ethereum. Although the projects are functionally different and solve different problems, the Ethereum chain remains the main architectural block.
Will this change in attitudes towards other assets?
From an institutional point of view, investors don’t look at any other asset besides Bitcoin and Ethereum, for the sole reason that their value is an integral part of their vast community. Other assets do not have a similar market capitalization and show no resistance to market volatility. Institutions have definitely entered the crypto space, but are unlikely to abandon Bitcoin and Ethereum in the near future.
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