Following the success of decentralized finance in recent months, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has been experiencing an inflow of big money from institutional investors.
This inflowing of big money has also been significantly having a positive impact on the price of Ethereum (ETH) over the past couple of months.
Data from different crypto analytics platforms show that institutional investors are trying to join the Ethereum bandwagon before the cryptocurrency becomes an important part of traditional finance markets.
Ethereum (ETH) being more valuable than the flagship cryptocurrency has been a top topic for debate in the crypto ecosystem.
Despite the fact that Bitcoin (BTC) is the most popular and valuable crypto asset, JPMorgan analyst is showing that institutional investors are taking more positions in Ethereum rather than Bitcoin.
In recent months, Bitcoin has experienced multiple price crashes, which is, in turn, dissuading institutional investors and making its bullish trend less predictable.
Big-money Investors Are Shying Away From Bitcoin Futures
As written by a JPMorgan analyst and reported by Business Insider, Big-money investors have started to shy away from the Bitcoin Futures trade and moving to Ethereum Futures instead, as interest in the largest cryptocurrency drops.
According to the report, in September, Bitcoin Futures on the Chicago Mercantile Exchange traded below the price of an actual Bitcoin.
JPMorgan analyst wrote:
“This is a setback for bitcoin and a reflection of weak demand by institutional investors that tend to use regulated CME futures contracts to gain exposure to bitcoin”
Under healthy demand, futures usually trade at a premium to actual Bitcoin. According to previous JPMorgan research, this occurs because high Bitcoin storage costs and the juicy yields available for passive crypto investing push up futures prices.
However, for now, according to the note, the reverse is the case for Bitcoin. The dynamic has made the current weakness in futures bearish for Bitcoin.
On the other hand, institutional investors have started to pivot to Ethereum steadily since August. According to CME data cited in the note by JPMorgan, over actual ETH prices, the 21-day average Ethereum futures premium surged to 1%, indicating a healthier demand for Ethereum by institutional investors compared to Bitcoin.