Elon Musk and Tesla were two of the biggest stories last year. But now Ethereum is giving the eccentric billionaire and high-multiple automaker a run for their money.
These two charts illustrate the change of investor interest as the world’s No. 2 cryptocurrency gains followers. First, Google Trends shows how Ethereum has rapidly gained interest with Internet search queries. Notice how TSLA has steadily drifted lower since its stock split last summer.
Next is a two-year chart with percentage change. TSLA was up more than 1,800 percent before fizzling in January. Ethereum caught on fire around the same time and shot past the automaker in late April.
The change comes as more institutional investors view Ethereum as a serious asset. A recent article on 21Shares described sharp growth in the number of wallets holding at least 10,000 Ethereum — a threshold for institutional ownership. Coindesk also reported on May 4 that options trading in the cryptocurrency had moved past larger rival Bitcoin.
In another sign of growing interest, TradeStation data shows volume in Ethereum futures (@ETH) hit a record yesterday. Bitcoin contracts (@BTC), on the other hand, haven’t seen that kind of turnover since January. The growing engagement briefly pushed Ethereum’s market capitalization above $500 billion, according to CoinMarketCap. TSLA, in comparison, ended yesterday at $550 billion.
Oher forces could drive the interest in Ethereum. EIP-1559, or “fee burning,” will remove coins from circulation as early as July. Then in 2021, issuance will decline with the upgrade to Ethereum 2.0 and proof-of-stake mining. Those two changes could give Ethereum an even tighter supply than Bitcoin.
There’s also been increased engagement after Canada allowed the launch of three Ethereum exchange-traded funds (ETFs) in April. Just last week ETF sponsor VanEck filed with the Securities and Exchange Commission to launch a similar fund in the U.S. While the timeline for approval isn’t clear, it’s one more potential positive for the digital asset.