It’s a trend reversal. Large institutional investors are now turning to Ether rather than Bitcoin. An observation made by JPMorgan via BTC and ETH futures data.
Which cryptocurrency will dominate the market in 3 to 5 years? Very smart the one who can say it with certainty. Despite the rapid growth of crypto-assets like Solana (SOL) or Cardano (ADA), the duel will undoubtedly be played out between the two current giants.
Ethereum and Bitcoin play elbows, although BTC still dominates when it comes to popularity and capitalization. This is the first-mover bonus. The balance of power is balanced, however.
Bitcoin tilts in the red on futures contracts
In terms of performance over one year, ETH is clearly the leader. But on other metrics, it is also the 2nd cryptocurrency on the market which supplants its elder. An example ? The volume of transactions on Coinbase.
But for JPMorgan, it is now possible to assert the superiority of Ether over another indicator, and not the least. The investment bank has indeed plunged into the figures for August and September futures contracts of CME (Chicago Mercantile Exchange).
The main lesson from this study is the “weak demand” from institutional investors for BTC futures. In addition, they are not just any investors since they are the adults.
And these institutions are not deserting the crypto-asset market, however. The hierarchy of their priorities is changing. Thus, investor interest is shifting to Ethereum, which is therefore perceived as having greater potential.
A subtlety, however. JPMorgan studies futures contracts. Clearly, there is no question of the direct purchase of Bitcoin or Ether. No, institutions negotiate contracts on the future price of an asset, BTC or ETH therefore.
The future of Ether seduces institutional investors
However, this market is considerable. Futures trading weighs 65 billion dollars, remind our colleagues at Decrypt. For these investment products, Ethereum therefore displays better health than Bitcoin.
In September, BTC swung into the red. The difference between bitcoin futures prices and spot prices changed over the analysis period from positive to negative. Ether follows a different dynamic. Not only does the difference remain positive, but better still, it increases.
“This indicates that institutional investors have a much healthier demand for ether than for bitcoin,” JPMorgan infers. This trend is also reflected in the weekly CoinShares barometer.
Over the past week, BTC raised the bar with an inflow of $ 15 million. Over the past 16 weeks, however, this is only the 3e once this flow enters the positive zone. At the same time, this balance was 6.6 million dollars for ETH and 4.8 for Solana with institutional investors.
Several large institutions recently published figures relating to the prospects of Ethereum. And these are particularly encouraging. Standard Chartered is counting on an ETH price of $ 35,000. Ark Invest is seeing spectacular growth. For the CEO of deVere Group, it is highly likely that Ethereum will overtake Bitcoin in terms of valuation in the next 5 years.