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Are Institutions really favoring Ethereum over Bitcoin right now

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Requisite institutional interest in major assets such as Bitcoin and Ethereum is nothing new anymore. Since the latter stages of 2020, accredited investors became more and more evident with digital assets, as institutions started to diversify their portfolios. However, since the drop in May 2021, these investors have kept a low profile, without making any splash in the water.

Now, recently JP Morgan came out with a report, suggesting that institutions are currently keener with Ethereum than Bitcoin. While the narrative isn’t completely precocious, a deeper analysis may allow understanding if investors are actually displaying interest in Ethereum.

JP Morgan’s Ethereum claim; valid?

Recent reports from the investment bank suggested that investors were currently dropping their Bitcoin futures position and pivoting towards Ethereum increasingly. Last month, BTC futures on CME traded below the price of an actual bitcoin which may have weaken the institutional demand.

Now amidst that scenario, it was identified that the 21-day average on Ethereum futures premium increased by 1% over the price of Ethereum, indicating healthier demand for Ethereum against Bitcoin at the moment.

Additionally, Crypto Compares’ report also suggested that Grayscale’ Ethereum Trust (ETHE) was the most traded digital asset product in September. The average trading volumes increased by 29% to $250 million, rising above GBTC for the first time.

However, highly traded product didn’t mean institutions were coming in right after.

Grayscale’s inflow continues to drop alongside holdingsĀ 

Source: glassnode

According to glassnode data, Ethereum’s grayscale premium has continued to remain in the negative indicating that the platform hasn’t improved in terms of product expansion from a profitable perspective. Additionally, it was observed that ETH grayscale holdings have continued to reduce in the charts, which meant institutional interest wasn’t significant on the platform to retain or buy back at the current moment.

Now, speaking about the long-term sentiment, ETH may see an increase its institutional positions because of its current ETH 2.0 staking property.

At press time, 6.6% of the Ethereum circulating supply is locked in ETH 2.0. What that does is it improves investors’ sentiment, in terms of essentially creating a supply shock. With respect to other PoS digital assets, Ethereum is the most recognized and moving fundamentally forward in the development direction.

Hence, over time, the institutions may become more evident and transparent with their interest in ETH, but at the moment, it is yet to clearly jump ahead of Bitcoin in terms of accredited positions.


Biraajmaan covers market trends of major cryptocurrencies. As a graduate in engineering, his interests lie in Blockchain technology. With over a year as a journalist, his articles focus on US and UK markets.
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