According to the data from the Coinbase cryptocurrency exchange, the ether (ETH) market was almost three times the size of the Bitcoin (BTC) market in the first six months of this year. Large investors diversified into the native token of Ethereum’s blockchain
Ethereum Transaction Volume Increased to $1.4 trillion
From January to June, Ethereum’s transaction volume was $1.4 trillion, up 1.461% from $92 billion in the first half of 2020.
During the same period, the trading volume of Bitcoin, the largest cryptocurrency, rose 489% to $2.1 trillion.
The price of Ether also outperformed Bitcoin, the S&P 500, and Gold, rising 210% in the six months ended June 30. Bitcoin is up 20%, the S&P 500 is up 14%, and gold is down 6.7%.
“Many of our largest institutional clients, including hedge funds, endowments, and corporates, increased or added first-time exposure to ETH in H1, believing the asset has long-term staying power tantamount to BTC while playing a differentiated role in their portfolios,” Coinbase’s report said.
Factors Affecting Ethereum’s Growth
According to Coinbase, based on data collected from 20 crypto exchanges around the world, the first half of 2021 will be one of the most active periods for cryptocurrencies ever, characterized by record highs, user acceptance rates and trading activity.
According to the data, the total market value of cryptocurrencies started the year at $769 billion, up to 86% to $1.4 trillion during that period.
The purpose of Ethereum is not just a value token, because products like smart contracts can be built on the Ethereum blockchain, which is seen as an opportunity for developers and investors. Although Bitcoin is considered an emerging store of value that can compete with gold, its versatility in use isn’t as good as Ethereum.
Coinbase stated in the report that among the factors that lead to the outstanding performance of Ethereum, the increased use of decentralized financial or DeFi applications and the optimism of the investors regarding the upgrade from Ethereum to “ETH 2.0” belong.
The upgrade of the Ethereum Improvement Proposal (EIP) -1559, planned for August 4th, will activate a mechanism that withdraws a variable amount of ETH from circulation every time a transaction is executed. This will dampen supply growth and make Ethereum attractive as a store of value.