Head of Institutional Coverage at crypto trading platform FalconX Aya Kantorovich has said ethereum is the next ideal destination for institutional investors once they have finished with bitcoin.
Speaking to Business Insider, Kantorovich noted that the ethereum network already has an established underlying infrastructure to support the entry of institutions.
Kantorovich added that the continued upgrade of the ethereum network would likely spark more interest from institutions. According to Aya:
“They’ve just started understanding: what are the payment rails, the on and off-ramps, the custody solutions, how do we make sure everything is compliant with our trading partners, who are the trading partners. And they just finished that with bitcoin. Now doing that with ethereum is going to be really easy because the infrastructure’s already set up.”
She said that despite ethereum hitting a record price, the rally is not comparable to bitcoin, which has witnessed an upsurge in institutional investors.
Impact of institutions on ethereum price
An entry of institutions into the ethereum ecosystem will likely spark the price to surge further. Similarly, the adoption of bitcoin by institutions has seen the asset embark on a rally hitting an all-time high price of $64,800 on April 14.
After ethereum’s record price of $4,358 on May 5, 2021, Kantorovich notes that the asset is also witnessing an increase in capital inflow. She highlighted that trading on the Chicago Mercantile Exchange (CME) is witnessing investments of up to $10,000 on options contracts for ethereum.
Notably, the spike in ETH price is a result of the DeFi sector growth since most projects run on the ethereum network. The sector’s total locked value stands at around $50 billion, and Kantrovich projects it will potentially hit $100 million by the end of 2021.
She added that with the DeFi sector taking on the roles of the traditional finance system, institutions like banks should be concerned. However, Kantorovich stated that banks are already making inroads to incorporate different aspects of the DeFi sector to avoid becoming obsolete.