Two major cryptocurrencies, Bitcoin and Ethereum, dominate the headlines in the race for institutional adoption of digital assets. Although Bitcoin is popular as a premier cryptocurrency and digital gold, Ethereum stands out as an innovative blockchain network.
It is no longer a secret that corporate investors, financial institutions, and asset managers are exploring the cryptocurrency space beyond speculative exposure. Amidst the ongoing race, Ethereum is better positioned for large-scale corporate adoption than Bitcoin thanks to its infrastructure, flexibility, and ecosystem.
Bitcoin has evolved to become a store of value from its initial purpose to serve peer-to-peer digital payment and replace existing banking systems. Also, the limited supply of BTC, makes it an appealing asset for investors seeking digital scarcity.
However, the infrastructure of the leading cryptocurrency lacks modern functionalities to power institution-grade decentralized solutions. By that, the token has remained limited to storing and trading.
This article aims to dissect how Ethereum stands in a better position for recognition from institutional investors than Bitcoin, despite the latter’s market popularity.
Why Ethereum is appealing to corporate players
Ethereum is far beyond a digital currency and also offers a powerful architecture to support the development of smart contracts, DeFi tools, dApps, and token issuance. The programmability of Ethereum provides institutions with a new dimension of building innovations and financial solutions on the blockchain.
Aside from setting up a strategic reserve, institutional investors are trusting the Ethereum network to guide their exploration of the blockchain space. This attests to how Ethereum once again edges Bitcoin with its innovative infrastructure that supports decentralized applications.
Bringing securities, bonds, and other real-world assets on-chain requires more than a regular blockchain network. It demands a programmable system for issuance, compliance, automated settlement, and transaction flow.
Without a doubt, the Ethereum network’s capabilities are tailor-made for these aforementioned innovations. It is no surprise that top institutional firms with an interest in blockchain technology such as JPMorgan and BlackRock have all mentioned the Ethereum network in regard to their decentralized finance projects.
Recently, SharpLink Gaming, the second-largest corporate holder of Ether selected the Ethereum network for the launch of its NASDAQ-listed stock, SBET on-chain. By far, the innovation will create more access and liquidity for SBET, providing SharpLink with the firepower to buy more Ethereum.
While the Ethereum network guarantees more market exposure, Bitcoin’s slow speed and high network fees make it unsuitable for dApps despite its popularity. For fintech companies, tech firms, banks, and asset managers trying out innovations like settlement, cross-border payment, and tokenization, Ethereum is a reliable blockchain network.
Likewise, Bitcoin lacks native smart contract functionality and requires side chains and bridges to match Ethereum’s efficiency. The introduction of external protocols, further complicates the technology stack for corporate players to access the decentralized finance market.
Parting words
With its simplicity and scarcity, Bitcoin has cemented its position among other cryptocurrencies as a digital store of value. Nevertheless, investors want more than static assets, they are demanding a programmable network, tokenized securities, automated trade execution, and energy-efficient infrastructures.
These features are what make Ethereum excel and stand out as an appealing option ahead of Bitcoin for corporate investors. Furthermore, in the last few months, the crypto market has seen many activities from institutional investors in Ethereum.
For instance, SharpLink launched its Ethereum reserve in June, and since then, the company has acquired 837,230 ETH. Similarly, BitMine, the current biggest corporate investor of Ether bought 702,155 in September alone.
Within that run, US biotechnology firm, Lixte, also added 300 ETH to its coffers. On the flip side, Bitcoin also recorded notable buys from corporate holders but the trend around Ether indicates the rapid growth of interest in the token.
Combining its infrastructure and growing market attention, there are pointers that in the next few years, Ethereum will be in a better position compared to Bitcoin as a good option for institutional investors.
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