Are Bitcoin and Ethereum Attracting More Institutions? Analysts Weigh In

Many analysts believe the present wave of price hikes and technical upgrades recently enjoyed by leading digital currencies like bitcoin and Ethereum will lead to a huge surge in institutional crypto investing.

Bitcoin and Ethereum May Be Boosting Institutional Confidence

Not long ago, the price of bitcoin rose to a ten-month high and hit $30K for the first time since last June. The world’s number one digital currency has been on the rise since the beginning of the year and has nearly doubled its price from the end of 2022 (during that time, it was trading in the mid-$16K range).

But bitcoin isn’t alone in its present ascension. The world’s number two digital currency and the primary competitor to bitcoin, Ethereum, has endured what’s known as the Shapella upgrade. This has opened the door to all kinds of staked ether withdrawals, which were not available prior to this point. As a result, Ethereum has entered a rather bullish path and recently struck $2K per unit for the first time in what feels like an eternity.

Analysts with a broker called Bernstein believe these elements – and others – will cause more institutional investors to enter the crypto arena. They believe these institutions will view crypto in a much more positive light and seek to add these assets to their portfolios as the prices are likely to gain further steam in the coming months and weeks. In a report, the analysts wrote:

The opportunity to build a new institutional financial stack on the blockchain remains a worthy goal, and serious participants remain focused on the long term.

For the longest time, the belief has been that if institutions can get involved in digital currency investing, the industry will take on a much more legitimate and mainstream appearance. However, it’s been troublesome getting them to hop on board as many of them do not see the space as valid or secure enough to warrant further attention.

While there have been occasional institutions out there (i.e., MicroStrategy, Square, etc.) that have shown interest in crypto, they are ultimately in the minority, and most of them prefer to play it safe with stocks, cash, and bonds.

The Banking Failures Are Also Playing Roles

But with the recent banking failures in the U.S. and Europe, the analysts are confident that institutions will begin to see assets like bitcoin as potential “safe havens” and start investing their money in the digital side of the financial spectrum. They commented in the report:

Any potential dislocation, whether on the bank’s credit side or on the sovereign side… positions bitcoin perfectly as a safe-haven asset alongside gold.

Despite its recent bullish behavior, bitcoin has taken a step back at press time given there is sudden fear surrounding inflation in the U.K., as numbers were higher than expected.

Tags: bitcoin, Ethereum, Institutions