For the first time in history, the second most valuable cryptocurrency in the world, ethereum, has surpassed bitcoin in terms of trading volume at the largest cryptocurrency broker in the United States, the Coinbase.
According to the platform, ethereum was responsible for 26% of the total trading volume in the second quarter of this year, compared to 24% for Bitcoin.
That suggests it may have been a fluke that the price of ethereum increased significantly in the second quarter of this year, after bitcoin kind of peaked at $64,000.
Institutional trading volumes are starting to dominate the market, reaching $317 billion from the $215 billion in a magnitude higher than the $17 billion in the second quarter of 2020.
For retail investors, volumes reached $145 billion and are significantly higher than the $11 billion in the second quarter of 2020.
Institutional investors are also starting to dominate the market with $92 billion of platform assets held by them, up from $11 billion in the second quarter of 2020.
In terms of retail, they held $15 billion in assets in the second quarter of 2020, and now hold $88 billion in the last quarter, with institutional investors taking over in the fourth quarter of 2020.
Still, there isn’t a big gap between institutional and retail ownership, while for trading volumes there is a difference of $172 billion.
Thus, institutional investors clearly trade much more, and it is not clear what exactly this suggests, except that both retail and institutional investors have a somewhat equal influence with respect to basic supply and demand.
Therefore, we continue to see the 50% volatility fall and gain as retailers panic, thus perhaps further influencing bitcoin price in the medium to long term.
On the other hand, financial companies are likely to have more leverage in the short term, as they trade twice as much as retail investors.
Coinbase also said it now has a total of 68 million verified users.
Retail monthly transaction users (MTUs) increased to 8.8 million, a 44% increase from the first quarter of 2021, with more than 9,000 institutions continuing to deepen and broaden their activities in the cryptoeconomy and more than 160,000 partners in the ecosystem that are using our cryptocurrency tools and services to engage with their own customers.