CME Ether Futures Launch Boosted Institutional ETH Investment Inflows

Crypto asset management firm CoinShares says the optimism generated by the launch of Ether (ETH) futures on the Chicago Mercantile Exchange (CME) triggered an influx of institutional funds into the second-largest crypto by market capitalization. Meanwhile, Ethereum recently set a new all-time high above the $1,800 mark with some market analysts indicating that $2,000 is on the horizon.

Ether Flips Bitcoin for Institutional Investment this Past Week

According to Reuters, data from CoinShares shows more institutional investment in Ether than Bitcoin in the last week. Of the $245 million from big-money players into the crypto funds and products, 80% were routed to Ether taking its year-to-date (as of last week) in institutional inflows to $260 million.

This significant pivot came in the lead-up to the CME’s ETH futures listing on Sunday (Feb. 7, 2021). Ether now becomes the second crypto to have a futures contract listing on the largest futures exchange service in the world.

Institutional ETH investment has been on the rise in recent months especially with the Grayscale Ether Trust. Back in October 2020, the Trust secured a reporting company license from the U.S. Securities and Exchange Commission (SEC).

The increasing appetite for ETH among institutional players also say Grayscale acquiring over $215 million worth of Ether back in November 2020 at a 128 percent premium. This was in addition to the 750 million ETH tokens purchased by the crypto asset management giant back in April 2020.

With Ethereum taking the largest share, Bitcoin institutional inflow amounted to about $41.9 million in the past week, according to CoinShares data. Commenting on the decline, Coinshares investment strategist James Butterfill remarked that the drop was not an indication of profit-taking strategies by big-money Bitcoin investors. instead, Butterfill surmised that the current sentiments appear to be one of buying and holding with BTC primed for even more upside in terms of price action.

The continuous flow of investment from big-money players into crypto products has seen Grayscale maintain its meteoritic rise in assets under management (AUM). As of last week, Grayscale’s AUM stood at $30 billion.

Bitcoin is still the only crypto seeing significant direct exposure from institutional investors. As previously reported by BTCManager, Tesla joined the expanding cast of companies adding BTC to their balance sheet, announcing a $1.5 billion Bitcoin outlay.

The electronic vehicle (EV) manufacturing giant also revealed that it will soon begin accepting Bitcoin as payment for its cars and it plans not to liquidate the BTC acquired via this channel, a probable strategy to increase its holdings of the largest crypto by market capitalization.