Ethereum's Price Surge is Sparking Institutional Investor Interest

Institutional investors are taking a greater interest in ether as the price climbs, OTC trading experts have told CoinDesk.

Mar 17, 2017 at 12:15 p.m. UTC
Updated Sep 11, 2021 at 1:10 p.m. UTC

With the recent surge in the price of ether, institutional investors have started taking a greater interest in the cryptocurrency, OTC trading experts have told CoinDesk.

Ether, the token that powers the smart contract-focused blockchain platform ethereum, has seen its price climb roughly 150% in the last week, according to CoinMarketCap, reaching above $40 in a historic first for the asset.

In response, analysts have offered varying explanations when explaining this sharp price increase, with some pointing to an overall rally in digital currencies and others asserting that ether, the second-largest cryptocurrency by market capitalization, is encountering noticeable tailwinds as a result of bitcoin’s recent struggles.

Martin Garcia, vice president for Genesis Global Trading, weighed in on how ether's sharp rally has helped spark the interest of institutions.

He told CoinDesk:

"As the market cap has increased in recent weeks, we've finally started to see institutional investor interest pick up in ethereum, something we hadn't really seen before."

Garcia noted that price action has occurred on both sides of the trade, with some investors seeking to short the fast-moving market as well.

Yet, Garcia was not alone in expressing this sentiment.

Harry Yeh, managing partner of investment manager Binary Financial, offered similar input, stating that his firm, which places large trades for both high net-worth individuals and institutions, has been trading ether "quite a bit".

The cryptocurrency has proved to be quite popular as of late, he told CoinDesk.

"We do get a lot of calls for ethereum now. I would say about 30% of the phone calls we got this week were for ethereum," Yeh explained.

Garcia also spoke to the digital currency's rising popularity, emphasizing that historically, his firm's institutional interest has involved bitcoin. However, his clients' recent interest in ether has served as a contrast.

One consequence of this cryptocurrency's growing popularity is that ether is "probably one of the more liquid spot trades on the market", Yeh told CoinDesk.

This heightened liquidity is just one more positive sign for ether, whose market capitalization recently surpassed $4bn for the first time ever.

Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Genesis Global Trading.

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