Following Shapella, Institutions Are More Interested in Ethereum
Ever since the Shapella upgrade, it appears more institutions are interested in Ethereum.
Ethereum Is Getting Way More Attention
Ethereum is the world’s second largest digital currency by market cap and the primary competitor to bitcoin. Not long ago, the asset rose beyond the $2K mark for the first time in what felt like an eternity. The price boost stemmed from a recent upgrade to its network in which staked Ethereum units were suddenly available for withdrawal.
This has allegedly stirred the interest of institutional investors. According to Ali Martinez, a bitcoin and crypto analyst, the attention for both bitcoin and Ethereum have skyrocketed in recent weeks. Martinez mentioned in a recent Twitter post:
Reserve risk just crossed 0 again. This bitcoin indicator signals huge potential. When the bitcoin reserve risk moves above 0, it signals parabolic price moves.
Sadly, it appears the recent activity of bitcoin has rubbed traders the wrong way. For example, not long ago, the world’s number one digital currency by market cap rose to a ten-month high of about $30K, though it failed to retain this position and eventually dipped into the high $20K range. Yuya Hasegawa – a crypto market analyst at Bit Bank – recently wrote:
The market is struggling to find a reason to buy and support the price as profit-taking selling pressure and long liquidation have pushed down the price this week, while the U.S. stock market loses its direction. Unfortunately, despite the decline, bulls do not seem to have given up just yet as bitcoin futures market’s funding rate still reads positive, which could limit the upper potential for bitcoin and worsen its short-term drawdown.
With activity and love for bitcoin going down in recent days, this has only paved the way for more institutional attention towards Ethereum, which was recently noted in a report by K33 research head Bendik Schei. The report says:
As expected, Shanghai was followed by massive Ethereum withdrawals. The market overestimated the Shanghai selling pressure, leading Ethereum to outshine bitcoin on the backdrop of burgeoning institutional activity.
In what appears to be a bonus maneuver, the Shapella upgrade has further allowed ETH to distance itself somewhat from BTC. Up to this point, Ethereum and bitcoin have long been correlated. When BTC goes up or down, ETH will usually follow suit, but this is arguably changing, as bitcoin – while traveling downward – is not affecting the bullish signs currently being noticed in Ethereum.
The Separation of Two Coins
Analysts David Duong and Brian Cubellis wrote:
The relevance of this falling correlation for institutional investors is that it can affect quantitative strategies that rely on cross hedging one asset for the other (or using ETH as a hedge for less liquid altcoins). It supports diversification arguments in favor of holding both BTC and ETH.
The post Following Shapella, Institutions Are More Interested in Ethereum appeared first on Live Bitcoin News.
Filed under: Bitcoin - @ June 3, 2023 5:00 pm