Coinbase, the largest U.S.-based cryptocurrency exchange that went public on Nasdaq in April 2021, released its mid-year institutional report, revealing striking trends in crypto trading activity. Ethereum (ETH) recorded $1.4 trillion in trading volume—a 1,461% increase year-over-year—while Bitcoin (BTC) reached $2.1 trillion, growing by 489% in the same period. This underscores Ethereum’s accelerating adoption compared to Bitcoin.
Why Ethereum Gained Traction
As the second-largest cryptocurrency, Ethereum’s surge stems from several factors:
- DeFi Expansion: Growing usage of Ethereum-based decentralized finance (DeFi) protocols highlights its role as a global platform for financial innovation.
- Ethereum 2.0 Transition: Investor optimism around the network’s upgrade to a proof-of-stake model.
- EIP-1559 Implementation: This proposal aims to reduce ETH supply, potentially increasing scarcity.
- Scalability Solutions: Layer-2 technologies like rollups improve transaction throughput, addressing network congestion.
👉 Discover how Ethereum’s upgrades could reshape crypto markets
Institutional Adoption of Ethereum
Coinbase noted increased interest from hedge funds, corporations, and institutional investors, who view ETH as a long-term asset alongside Bitcoin. These entities leverage Ethereum to diversify portfolios, attracted by its utility in smart contracts and decentralized applications (dApps).
Bitcoin’s Market Position and Challenges
Despite Ethereum’s growth, Bitcoin remains the dominant cryptocurrency by market cap:
| Metric | Bitcoin (BTC) | Ethereum (ETH) |
|---|---|---|
| Market Cap | $743.5 billion | $266.4 billion |
| Price | $39,618 | $2,278 |
Bitcoin’s price volatility was evident in 2021: it peaked at $64,899 in April but later fell below $40,000.
Mining Shifts Post-China Crackdown
China’s ban on crypto mining caused Bitcoin’s global hash rate to drop from 198 million TH/s (April) to 91 million TH/s (June). However, Coinbase predicts:
- Relocation to North America: Mining operations are migrating, reducing China’s influence.
- Sustainable Energy Focus: Competition for clean energy may decentralize mining further.
- Regulatory Balance: Democratic nations adopting clearer policies could stabilize the network.
👉 Learn how Bitcoin’s mining evolution impacts investors
FAQs
Q: Will Ethereum’s price surpass Bitcoin?
A: While ETH’s growth is notable, Bitcoin’s scarcity (21 million cap) and brand recognition keep it ahead—for now.
Q: How does EIP-1559 affect Ethereum?
A: It introduces a fee-burning mechanism, reducing ETH supply over time and potentially increasing value.
Q: Is Bitcoin mining still profitable after China’s ban?
A: Yes, but profitability depends on energy costs and hardware efficiency in new locations like the U.S.
Q: Why do institutions invest in both BTC and ETH?
A: Bitcoin is seen as “digital gold,” while Ethereum offers utility in DeFi and Web3, balancing risk and reward.
Key Takeaways
- Ethereum’s trading volume growth (1,461%) outpaced Bitcoin’s (489%) in H1 2021.
- Institutional adoption is rising for both assets, with ETH appealing for its technology use cases.
- Bitcoin’s mining decentralization is underway, but price volatility persists.
The crypto landscape continues evolving, with Ethereum carving a niche beyond Bitcoin’s store-of-value narrative.