Investors Choosing Ethereum and the DeFi Future

Bitcoin just hit another high near $70,000 the other day, but ether, the native token of the Ethereum network, continues to not only hit record highs but also steal market share from the golden child that is bitcoin.

Ether hit close to $4,850 in a new record and has grown more than 560% so far this year in comparison to the 135% growth of bitcoin, reported CNN. The growing popularity of DeFi and nonfungible tokens (NFTs), which are primarily hosted on the Ethereum blockchain, and the growth of smart contracts means that the ether future is shining bright.

The current market cap for ether has grown to roughly $575 billion for all coins in circulation as it continues to gain on bitcoin’s market cap, currently valued around $1.3 trillion. Both cryptocurrencies combined are close to two thirds of the $3 trillion market.

“We’re seeing a shift in the industry where bitcoin went from being 75 percent of the overall cryptocurrency market cap to about 50 percent,” Michael Pinsker, founder and president of wealth management tech firm Docupace, said. “That percentage should come down even further.”

Popular crypto broker Coinbase reported 22% of trading volume was from ether trades, whereas 19% was for bitcoin in its most recent earnings report. It’s the second quarter in a row that ether has beaten out bitcoin for trading volume, and it’s a trend that many expect will continue going forward as DeFi grows.

With the launch of the bitcoin futures ETFs recently and their popularity, experts are anticipating an ether equivalent sometime on the horizon. “Institutions want more exposure to cryptocurrencies, so I anticipate there will be ether ETFs,” Tribe Capital’s Madfes said.

For investors who are looking for a way to gain exposure now to the growth and potential of the Ethereum network, Grayscale offers the first Ethereum-focused fund in the U.S. The Grayscale Ethereum Trust (ETHE) is benchmarked to the CoinDesk Ether Price Index and seeks to track the ETH market price.

The fund allows investors to gain exposure to ether through a secure structure that is passively invested in Ethereum. By gaining exposure in the form a security, investors don’t have to buy, store, and safekeep ether (ETH) themselves. Ether via the fund is stored in cold storage with Coinbase as the custodian.

ETHE allows investors to have shares that are titled to their name, auditable, easy for financial and tax advisors to account for, and easy to transfer to beneficiaries. The Trust is an SEC-reporting company registered pursuant to Section 12(g) of the Securities Exchange Act of 1934.

The fund has an annual fee of 2.5% and currently has $14.9 billion in AUM.

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