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In addition to Bitcoin, Coinbase also points to the institutional demand for Ethereum

Coinbase Year in Review’ 2020 report stated that there was a growing institutional demand for Ether, amid growing corporate investments in Bitcoin. According to researchers at Coinbase Institutional, while the exchange’s clients mostly bought Bitcoin last year, a growing number also took positions in Ethereum.

Source: Coinbase

Most of the institutional clients at Coinbase think of Ethereum as a “decentralized computer network” that shares some of the key properties of Bitcoin. Regarding the ownership of Ether, these clients see “a combination of” the asset’s potential as a store of value and as a digital product that is essential to drive transactions on Ethereum.

Also Read: Experts says Bitcoin and Ethereum are reacting to your technological developments

Many think that a growing interest in DeFi is the main reason behind the rise in the price of Ether. At the same time, Fundstrat’s David Grider predicted that a booming DeFi economy could propel ETH to a seven-fold increase.

Last year, Ethereum’s development and investment activity in DeFi grew, as did Ethereum-based stablecoins, according to the Coinbase review. However, the exchange noted issues with applications currently using Ethereum, including friction of scale, high gas fees, when the network becomes congested, and “complex smart contracts,” which can “grow to contain large reserves of crypto assets. and thus attract the bad actors “

Also Read: US Treasury Secretary Yellen wants global minimum tax and bitcoin regulation

Coinbase clientele believes that Ethereum can become the primary settlement network underpinning this new financial system. According to the review:

Furthermore, Coinbase is watching “closely” CBDC development and pointed out the “obvious” benefits of digital currencies. He also hoped that governments developing CBDC “will work to preserve individual freedoms and privacy.” The exchange encouraged the crypto community “that understands these systems” to advocate for a government to develop electronic currency on “top of the blockchain networks.”

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