The upcoming changes have meant that interest in Ether is high, not just from retail investors but also institutions.
Kryptoin, a US-based digital finance firm, has filed with the SEC to launch an Ether-focused exchange-traded fund. Others such as WisdomTree and VanEck, have unveiled plans to create Ether-based ETFs.
“The boom in NFT adoption, as well as the continued innovation in decentralised finance (DeFi), will ensure that Ethereum continues to be the strong number two to Bitcoin with few analysts expecting the cryptocurrency to overtake Bitcoin in the future in terms of market capitalisation,” said Vikram Subburaj, co-founder and chief executive officer of Giottus crypto exchange.
Higher prices and wider utility of the Ethereum network has led to increased interest across Indian investors as well.
“The top five Indian exchanges recorded $20 million in daily trading volume for Ethereum since last month,” estimated Hitesh Malviya, founder of ItsBlockchain, a specialised blockchain research and investment platform. To be sure, this still accounts for only 0.05% of the global trading volume.
Data from India’s Giottus crypto exchange also suggests that there are at least twice the number of users who have invested in Ethereum compared to Bitcoin. Meanwhile, users who have invested in Ethereum and ERC-20 tokens (tokens that are launched on Ethereum blockchain) are six times that of Bitcoin.
Industry-wide data, however, is not available.
According to the 2021 Global DeFi Adoption Index by blockchain data platform Chainalysis, India ranks sixth in terms of DeFi adoption. DeFi is primarily designed on the Ethereum network, enabling peer-to-peer transfers, swift settlements, tokenisation, and more. This, too, is driving local interest in Ethereum.
Polygon, an Indian crypto startup, has developed an Ethereum sidechain to deliver better infrastructure scaling. “After the major success of Polygon, more startups are finding their way into the crypto and blockchain sector,” Malviya said.