Genesis Global says institutional investors show growing interest in Ethereum and DeFi, according to her, big players are paying more and more attention to the decentralized financial sector in general.
Institutional players have shifted their focus from Bitcoin (BTC) to Ethereum (ETH) and other decentralized financial tokens (DeFi) in recent months, according to a quarterly report published by exchange Genesis Global Trading.
“Trends in Genesis activity and the broader market confirm Bitcoin’s changing role as the industry’s entry-level asset and highlight the emerging prominence of Ethereum and decentralized finance,” noted Matt Ballensweig, Head of Institutional Lending at Genesis, On the report.
A ton of incredible insight in the @GenesisTrading Q2 Markets Report. We talk about supply/demand mechanics in lending markets, cryptoderivative themes and trends along with a host of other topics. It’s a meaty one so grab a cup of coffee. #Bitcoin https://t.co/gQ9n7MUCHf
— Matt Ballensweig (@MattBallen4791) August 4, 2021
He also pointed out that Bitcoin’s dominance in the total capitalization of the cryptoactives market has shrunk from 70% at the end of 2020 to less than 45% at the end of the second quarter of 2021. So far, Bitcoin’s dominance is at 43.6% , according to CoinGecko.
Simultaneously, prices for ETH and some key “blue-chip” DeFi tokens more than doubled in the same period, Genesis notes. For example, the company has seen rapid growth in trading volumes for such digital assets from Uniswap, SushiSwap and Aave, as well as native tokens from Ethereum’s competitors including Solana and Binance Smart Chain.
- Genesis Global says institutional investors show growing interest in Ethereum and DeFi.
This rapidly growing institutional interest in DeFi also spurred Genesis Custody to add support for AAVE, COMP, DAI and UNI in the second quarter. Notably, Bitcoin’s share of Genesis spot trading volumes decreased from 80% to 47%, while Ethereum’s increased to around 25%.
“The growing involvement of legacy financial institutions in cryptoactive markets is making it impossible to ignore.”
Added Genesis CEO Michael Moro.
“The industry will continue to mature as we see greater adoption of cryptoactives and diversification within the space.”
Interestingly, Moro has previously argued that Bitcoin’s evolution as an asset class and the investments of companies like Tesla in February were key to the asset’s success. At the time, he also pointed out that companies are starting to focus more on Bitcoin as a good guarantee.
“A big part of our lending business today is about putting the Bitcoins that companies buy as collateral and borrowing the US dollar against them. The idea that Bitcoin is a good guarantee is pretty new,” noted Moro.
But it appears that the institutional cryptocurrency wind is shifting, as “it’s almost as if Bitcoin, considered by many to be a hedge against fiat currency devaluation, has decided to stay out of it,” Genesis concluded.