Listed companies are madly buying Bitcoin. Why don’t they buy Ethereum? Will the institution be the new pillar of Ethereum?
As we all know, the beginning of the bull market in the cryptocurrency world is mainly driven by two major contributions, one comes from the purchase of Bitcoin by institutional investors; the other comes from the full rise of the Ethereum DeFi ecosystem. So, is it possible for institutional investors to purchase Ethereum in large quantities?
According to the data, among the companies currently listed in the United States, whether MicroStrategy, TEDA or Square and other giants, they only bought Bitcoin, but not Ethereum. The Grayscale Fund even holds Bitcoin 7 times more than Ethereum, so why do institutional investors prefer Bitcoin instead of Ethereum? The “store of value” attribute of Ethereum is not as prominent as Bitcoin. Compared to the total amount of 21 million Bitcoins, Ethereum does not limit its total amount. Today its annual inflation rate is about 4%, and it will continue to decrease. Although the growth rate of Ethereum will gradually decrease, it is still not as popular as Bitcoin’s way of limiting the total amount.
Even if the total amount is not capped, it does not prevent Ethereum as a method of storing value. However, Ethereum’s network is not “stable” compared to Bitcoin. Since Bitcoin was born, it has never undergone a large-scale upgrade. Even if some expansion requirements are abandoned, it has always ensured the overall stability of the network. Such stability has undoubtedly given investors more confidence. Gold is the same in traditional value storage methods. Despite the inconvenience of storage and trading, gold, as a metal that is extremely difficult to corrode, has made it the best value storage method for thousands of years.
In contrast, Ethereum has experienced the controversial DAO hard fork in 2016. Today’s ETH token is actually a fork coin similar to BCH to BTC, and today’s ETC (i.e. Ethereum Classic) is similar to the original chain of BTC. Due to the nature of Ethereum’s continuous upgrade, it is inevitable for institutional investors not to worry about similar incidents in the future. From the perspective of value storage, Ethereum is obviously not as stable as Bitcoin.
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