Ether Trading Volume Surged 1,400% in First Half as Institutions Took Exposure: Coinbase

The ether market grew three times faster than bitcoin in the first six months of the year as large investors diversified into the native token of Ethereum’s blockchain, according to crypto exchange Coinbase’s half-yearly review published on Monday.

  • Ether’s trading volume totaled $1.4 trillion in the January-to-June period, a 1,461% rise from $92 billion observed in first-half 2020.
  • Trading volumes in bitcoin, the biggest cryptocurrency by market value, rose 489% to $2.1 trillion during the same period.
  • Ether also outshone bitcoin, the S&P 500 and gold in price performance, rallying 210% over the six months ended June 30. Bitcoin rose 20%, the S&P 500 gained 14% and gold fell 6.7%.
  • “Many of our largest institutional clients, including hedge funds, endowments, and corporates, increased or added first-time exposure to ETH in H1, believing the asset has long-term staying power tantamount to BTC’s, while playing a differentiated role in their portfolios,” Coinbase’s report said.
  • The report cited the explosive growth of Ethereum-based decentralized finance (DeFi), optimism that Ethereum’s transition to a proof-of-stake mechanism will turn ether into a yielding asset and the deflationary impact of the EIP-1559 upgrade as reasons for ether’s price rally.
  • The Ethereum Improvement Proposal (EIP)-1559 upgrade scheduled for Aug. 4 will activate a mechanism to take a variable amount of ETH out of circulation each time a transaction is executed. That will curb supply growth and may give ether a store-of-value-like appeal.