Aya Kantorovich, the Head of Institutional Coverage at the Falcon X, a crypto trading platform, has noted that institutional investors will make Ethereum their next destination after they are through with bitcoin.
In a conversation with Business Insider, Kantorovich said the makeup of the Ethereum network is already built up with infrastructure that will support and accommodate the entrance of institutional investors.
She added that the continuous upgrade of the network would further increase the interest from institutions. In her words, she said: “They have just begun understanding of what are the payment rails, the custody solutions. This understanding includes how to ensure that the setup is compliant with the trading partners. Having understood that with bitcoin, it is going to be very easy with Ethereum looking at the infrastructure set up already.”
She said that although the price hit its all-time high recently, the Ethereum price rally is incomparable with that of Bitcoin, which has seen a remarkable increase in institutional investors.
The Impact of Institutions on the Price of Ethereum
The appearance of institutional investors in the Ethereum ecosystem will more likely cause a rapid surge in the price of the digital asset. Similarly, the adoption of BTC by different institutions has seen the price of the asset grow rapidly, rising to hit a new all-time high of $64,800 on April 14.
After the new all-time high price of $4,358 recorded for Ethereum on May 5, 2021, Aya Kantorovich added that the capital inflow of the asset is witnessing an increase, and she mentioned that trading on the CME (Chicago Mercantile Exchange) platform had seen notable investments up to $10,000 for ETH on options contracts.
Remarkably, the surge in the price of Ether is a function of the growth the decentralized Finance sector is experiencing since the majority of the projects are facilitated by the Ethereum network. The total locked value (TVL) of the sector is currently standing at $50 billion, and from Kantorovich’s projection, it will by the end of 2021 hit $100 billion.
In her statement, she included that the Decentralized Finance sector taking the roles and function of the conventional financial system and institutions like banks should be a point of concern. “Although,” she said, “Banks are already paving the way for the adoption of the DeFi sector to remain relevant.”