Ethereum Upgrade Will Attract More Investment From Institutions

A Bloomberg Intelligence report suggests that Ethereum’s continued growth will depend on whether it remains the mainnet for many crypto projects. And some signs indicate that he will not lose his influence. For example, over the past three years, the total number of ETH tokens locked in smart contracts has increased by 1.4%. Bloomberg Intelligence believes that, despite the recent decline in interest in NFTs, non-fungible tokens have the potential to displace stablecoins and DeFi coins.

The expansion of ETH use cases has increased network activity compared to the previous bear market. On the other hand, some large companies associated with stablecoins and DeFi-sphere, on the contrary, faced the problem of lack of liquidity. When some only suspended the withdrawal of funds, others even declared bankruptcy.

In mid-July, the fund manager CoinShares published a report. It claimed that capital inflows into Ethereum continued for three consecutive weeks, bringing the cryptocurrency $7.6 million. The Grayscale Ethereum Trust is offering institutional investors access to Ethereum. The fund’s largest institutional holders are Rothschild Investment Corp, Weatherbie Capital LLC, and Rye Brook Capital LLC.

Ethereum outperforms BTC in key metrics

The report suggests that Ethereum may be an undervalued cryptocurrency.

It outperformed Bitcoin in three crucial metrics: active users, addresses with non-zero balance, and transactions.

Bitcoin will likely continue to follow the fall in stocks if the Fed continues to raise its base rate. However, it is still worth more than during the March 2020 low.

The number of active Ethereum addresses has largely stagnated from last year but is up 113% from the previous three years, outpacing bitcoin. The number of active bitcoin addresses decreased by 30% over the same period. It is also worth noting that on July 26, 2022, the 7-day moving average of active users increased by 46% or 180,000 people in one month. Ethereum transfer volumes are down 7% despite a 29% price drop.

Asset tokenization is a great opportunity

According to the report, crypto assets seem to follow the path of futures and exchange-traded funds.

Just as futures contracts provide access to assets without requiring the investor to own them, so tokenization can spread to all types of assets if technical or regulatory factors do not prevent it. The report argues that the fact that Tether and USDC were made possible by Ethereum is a testament to the value of blockchain technology.

By the end of 2022, Ethereum can offer 6-9% staking returns, the report added, provided the upgrade happens within that time frame.