The Ethereum market is experiencing significant growth, achieving a 160% increase since April and a 65% rise just in the last month.
Reasons Behind Institutional Investments Growth
Institutional investors and publicly traded corporations have shown unprecedented interest in Ethereum. Since mid-May, they have acquired 2.83 million Ethereum worth approximately 15 billion Australian dollars, significantly exceeding the production rate, as only 88,000 Ethereum were mined during the same period.
Comparison of Ethereum and Bitcoin
The Ethereum to Bitcoin (ETH/BTC) ratio has increased from 0.018 to 0.031 since mid-May, highlighting the growing appeal of Ethereum. Companies with Ethereum reserves reportedly have higher market valuations than their actual holdings.
Future Prospects for Ethereum
It is projected that institutional and corporate entities may accumulate a total of 5.33 million Ethereum over the next year. However, only about 800,000 new Ethereum are expected to enter circulation during this time, which could lead to a supply crunch amid rising demand. Matt Hougan, Chief Investment Officer at Bitwise, noted that with the current demand, prices could rise further.
The increasing interest in Ethereum and limited supply are shaping market dynamics. Investors should closely monitor these factors to forecast future price movements.
