It is a fact: institutional fever by Ether (ETH), the native cryptocurrency of Ethereum, comes to stay. More and more Wall Street companies are looking at this digital asset with more love … or, rather, with love.
A clear sample of this trend is that More than 1.7 million ETH are already in the hands of companiesfoundations, DAO protocols and even governments, such as the United States.
In this regard, James Ford, financial market analyst, He thinks: “It seems that institutions are finally beginning to realize that ETH could be the basis of many of the defining trends that could redefine not only cryptocurrencies, but also finance.”
It also emphasizes that “with its growing institutional adoption, attractive performance opportunities and an increasingly solid narrative, ETH begins to sneak into corporate treasury as a modern and ambitious alternative to traditional treasure bonds.”
Here it is important to go in parts to understand what Ford poses. In addition to the amount of Ethereum’s currency that is in the hands of institutions, it should A significant rebound in the entrances.
“In July, the ETFs of ETH registered 2.2 billion dollars in tickets, demonstrating that institutional adoption could be promoting this rebound,” says Ford.
On the other hand, it must be noted that ETH begins to sneak into the treasury for one reason: The possibility of generating extra income from approximate annual per year through staking. For this reason, more and more companies are issuing debt through shares or convertible bonds to finance ETH’s purchases, without depending on operational income.
This is the same strategy that Michael Saylor, CEO of Strategy, with the difference that the funds are intended to buy ETH instead of Bitcoin (BTC).
As Cryptonoticias, Sharplink (SBET), a company specialized in sports bets that is quoted in Nasdaq, has become one of the icons of ETH corporate adoption. Since this strategic reserve was created, SBET has obtained 322 ETH units through the Staking, the equivalent of 1.1 million dollars.
“With the general increase in cryptocurrencies, the fall in the value of the US dollar and short -term rates that probably begin to fall soon, investors are looking for yields beyond the risk curve,” Faord explains.
That is, for the specialist there is a change of mentality in institutional investors that favors ETH: it is no longer about protecting capital in instruments such as treasure bonds, but also to make it yield, even if interest rates lower. In this context, Eth emerges as an attractive alternative, although he is considered a risk asset.
And this institutional love has promoted the rebound in the price of ETH, which at the time of publication of this note is maintained above the area of $ 3,700.
As seen in the previous graph, ETH was three times about to exceed the historical resistance of 4,000 dollars. Ford believes that if the currency of the network created by Vitalik Buterin leaves that level behind, it will have the paved road to go looking for $ 7,000.
In addition to institutional adoption, another uprising for Ether is the approval of the National Innovation Orientation and Establishment Law, better known as Genius Law.
As cryptootics has reported, the norm seeks to integrate stable currencies into the traditional financial system of the United States, establishing clear rules for issuance, which could be translated into interoperability, new financial products and everyday use.
According to Node Analytica Research, a on-chain data analysis firm, the Stablcoins will experience an exponential growth, multiplying by 15 the current amounts, until reaching 4 billion dollars In tokenized money.
Taking into account that a significant portion of the volume of stablcoins circulates within the Ethereum ecosystem, it makes sense to project that part of the future emissions are directed towards already consolidated networks.
In that aspect, Ethereum leads with a 49.9% fee in the Stablecoins market, which is equivalent to about 129,000 million dollars, according to data from Defillthat are illustrated in the following graph.
A higher movement of Stablecoins within the Ethereum ecosystem usually leads to a greater activity in the network, which in turn increases the need for ETH to cover gas rates. This greater demand for native token could translate into bullish pressure on its price.
By way of closing, Ford highlights: “Ethereum has emerged as one of the great winners of the approval of the Genius law and the current tendency in cryptocurrencies. Institutions seem to be investing in ETH and accepting it as the potential place to develop tokenized assets and stable currencies.”
