Messari Researcher: Institutions Will Realize The Value Of Ethereum In 2021

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Messari Researcher: Institutions Will Realize The Value Of Ethereum In 2021

According to a researcher from the leading crypto analytics firm Messari, institutions will not skip Ethereum in 2021. So far, we have only seen companies and institutional investors talk about their Bitcoin investments.

But what about other cryptocurrencies? As the next iteration of the Ethereum network comes closer, these entities might also realize that ETH is a valuable crypto asset as well.

2018 was the year of regulations, 2019 the year of blockchain adoption, and 2020 the year of institutional interest. As the year comes to an end, the crypto community wonders if institutions will also continue buying cryptocurrencies in 2021. Per the words of Ryan Watkins, a senior researcher at Messari, we can expect a spark of interest in Ethereum next year.

In a Twitter post that he published on December 27, the Messari researcher predicts that institutions will jump from BTC to Ethereum. Once they realize that digital assets beyond Bitcoin are valuable, Watkins believes that we will see similar multimillion investments for ETH in 2021.

As Defiye reported earlier, the CME Group announced an Ethereum Futures investment product on December 16. The global markets company intends to open the smart contract ecosystem to the world by helping it gain exposure to institutional traders.

Watkins tweeted that ‘CME Futures is the writing on the wall’ and that CME Group will release the product because there is a demand for it.

However, the release of financial instruments related to cryptocurrencies usually has a negative connotation in this sector. Previous releases have often revealed that there is not that much interest as users previously believed. But will the sudden spur of proven institutional investments in 2020 end that cycle?

Institutions buy Bitcoin because of SoV, Ethereum cannot offer that

While it is true that Ethereum will gain more institutional exposure, we still have to see whether they are actually interested in investing. The Futures product launch is only a couple of months away, so any speculation will be disproved or proved shortly.

One thing which we have to note in this argument is the reason behind why companies have invested in Bitcoin. A notable influx of volume comes from investment funds Grayscale’s Bitcoin Trust Fund.

Obviously, these purchases are investment choices. But on the other hand, another wave of investments comes from firms who seek to hedge against legacy markets.

Microstrategy is a famous software development company that invested in Bitcoin on numerous occasions throughout 2020. Its CEO Michael Saylor has multiple times noted that the company bought digital assets because he believes that BTC can (just like gold) serve as a hedge against the U.S. dollar.

Companies such as Square and MassMutual have also invested for the same reason. Therefore, we can conclude Bitcoin thrives in 2020 not because of speculative value but rather for its Store-of-Value function. This information holds significant value for the previous argument. The fact is: Ethereum’s inherent design does not allow it to act as an SoV asset.

Nevertheless, the incoming full launch of Ethereum 2.0 may change that forever. We have previously discussed why individuals like Michael Saylor should buy ETH in preparation for the new PoS network. If everything turns out right, ETH might become a ‘superclass asset’. Ether will not only act as a capital asset but as a store of value and commodity as well.

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Marko Mihajlović

Marko is a content writer passionate about cryptocurrencies, blockchain technology, geopolitics, and information security. After an internship at Cointelegraph in 2018, he decided to pursue writing about the field of decentralized technology full-time.

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