A study by the Coinbase exchange says that 2021 went down in history as a stage in the rapid development of the cryptocurrency market. Both Bitcoin and other digital currencies have skyrocketed. Ethereum (ETH) trading volume in the first half of the year added at a much faster pace compared to Bitcoin. The researchers found that in the first six months, the amount of transactions with ETH increased by more than 1460% ($ 1.4 trillion). That is, the trading volume of ETH on Coinbase has grown 15 times.
During the same period of time, the amount of transactions with BTC added 489% ($ 2.1 trillion). For comparison, in the first half of last year, Bitcoin transactions did not exceed $ 356 billion. The volume of transactions with ether from January to June 2020 amounted to only $ 96 billion.
Thus, the first half of 2021 turned out to be one of the most active periods for cryptocurrencies for the entire observation period. Marked by new record highs and trading activity. These data were obtained based on the analysis of the dynamics of twenty crypto exchanges around the world.
“Many of our large institutional clients, including hedge funds, endowments and corporations, first started working with ETH in the first half of the year. Believing that the asset has long-term prospects comparable to BTC. But at the same time plays a differentiated role in their portfolios”, the report says.
The rise in the use of DeFi protocols on Ethereum confirms the value of the network as a global financial tool and platform for developers.
Overall market capitalization ratios
The report also highlighted the overall market capitalization figures for the first half of 2021.
Cryptocurrency market capitalization at the beginning of this year stood at $ 769 billion. In May it exceeded $ 2.4 trillion. However, then the value of digital currencies fell to $ 1.4 trillion. In annual terms it added about 86%, the authors of the report emphasized.
A significant part of the profitability of BTC came in the first months of 2021. And for ETH in May (then the asset was worth more than $ 4,000).
Bitcoin and Ether are trading at $ 39,800 and $ 2,290 at the end of July, respectively. Coinbase analysts found that compared to their peaks, these cryptocurrencies ($ 65,890 in April and $ 4,357 in May) fell 38.8% and 47.4%.
Can ETH beat BTC?
There has been a long debate over whether ETH can surpass BTC and become a leading digital asset. In early May, billionaire Mark Cuban named three reasons why ETH will be able to surpass BTC: the Ethereum network is capable of processing more transactions per second, the platform can become the future of finance, and it also has wider use than Bitcoin.
Renowned investor Mike Novogratz also believes such a scenario is possible as the Ethereum network expands rapidly:
“I think that one day Ethereum may even become the largest cryptocurrency in terms of capitalization, but it will have a very different use case than BTC”.