Ethereum Gaining Traction Among Institutional Investors, Outpacing Bitcoin

Gate's Chief Investment Officer has highlighted a notable shift in professional investors' approach to cryptocurrency investments. Increasingly, many are opting to bypass Bitcoin and directly invest in Ethereum as their initial foray into digital assets. This trend challenges the long-held belief that Bitcoin serves as the primary entry point for crypto investments, with Ethereum now sharing the spotlight.

Professional Investors Gravitating Towards Ethereum

During a recent live discussion, the CIO of a prominent crypto investment firm revealed an emerging pattern in institutional investment behavior. He noted that a significant number of professional investors are leaning towards Ethereum as their first crypto investment, attracted by its utility in decentralized finance, smart contract capabilities, and Web3 applications. This preference, he explains, stems from how institutions traditionally approach portfolio construction.

The expert pointed out that most professional investors don't actually hold gold in their portfolios. Gold is often viewed as a niche asset, with only about 15% to 20% of institutions including it, while the vast majority - 80% or more - focus on stocks and bonds.

Given that Bitcoin is frequently portrayed as digital gold, its appeal may be limited for many professionals who have never allocated funds to gold. "Many investors view Bitcoin as digital gold. I don't own gold, but I do invest in technologies," the CIO remarked.

Ethereum, on the other hand, aligns naturally with portfolios that already include allocations to innovative technologies. With the growing prominence of tokenization and stablecoins, he anticipates continued institutional interest in Ethereum.

Ethereum Reaches New Heights Amid Institutional Long-Term Strategy

While institutions perceive Ethereum as exposure to the technological foundation of a digital economy, Wall Street's fear of missing out has reached unprecedented levels, with US institutional demand for ETH hitting record highs.

A prominent crypto analyst has reported that in August 2025, Ethereum Spot ETFs acquired $3.87 billion worth of ETH, driven almost entirely by professional investors seeking long-term exposure. A leading asset management firm with $11 trillion under management has taken the lead, allocating $3.38 billion to ETH and $707 million to Bitcoin, clearly demonstrating a preference for Ethereum.

This surge in institutional buying propelled Ethereum to new all-time highs in August. Notably, the majority of these purchases are intended for long-term holding, which reduces immediate selling pressure and supports sustained price momentum. A monthly close above $4,630 would mark the highest since the 2021 bull market.

Additionally, Ethereum's on-chain transaction volumes exceeded $320 billion, indicating widespread engagement across decentralized finance, stablecoins, and tokenized assets. Staking continues to attract Wall Street's attention, with nearly 36 million ETH - representing 29% of the total circulating supply - now locked in staking contracts. Offering a 3% staking reward, Ethereum provides institutional investors with a steady yield, enhancing its appeal for long-term portfolio inclusion.

Disclaimer: This information is provided for educational purposes only. Past performance does not guarantee future results.