As the crypto market ticks up ahead of some important macro-financial, Fed-related dates this week, one prominent regular survey indicates Ethereum (ETH) is the coin larger investors are putting their weight behind.

According to the latest report from CoinShares – one of Europe’s largest digital asset investment and trading groups – Ethereum, the number two crypto by market cap, has seen a “dramatic rise in investor sentiment”.

A record 60% of its survey respondents have indicated that ETH has the most compelling growth outlook among the cryptocurrencies they have investment interest in, including Bitcoin (BTC).

The survey was conducted for the period beginning December 29, 2022 and ending last week, on January 23. It consisted of 43 responses from investors who cover US$390 billion worth of assets under management – so some pretty large players, in other words.

These sorts of investors, according to CoinShares data are currently “expressing little views on other digital assets” other than BTC and ETH.

“Despite deteriorating sentiment towards Bitcoin to Ethereum, an increasing number of survey respondents have invested into both,” reads the report, adding:

“This looks to have come at the expense of altcoin competitors to Ethereum, such as Cardano and Solana.”

Source: CoinShares Digital Asset Quarterly Fund Manager Survey


Ethereum’s Shangahi upgrade – bullish?

Ethereum, if you didn’t know, has a fairly major narrative that is very likely contributing to some of its market movement just lately. And that’s the protocol’s next upgrade, set for some time in March, dubbed Shanghai.

With Ethereum’s “Merge” from being  a proof-of-work protocol, like Bitcoin, to proof of stake, the early stakers/validators of the updated blockchain have yet to be able to withdraw their network-securing, yield-bearing staked ETH tokens. This changes with the Shanghai update.

Wait, isn’t more ETH available to be sold on the open market a bearish thing? Some people think so, but overall, the upgrade is seen as hugely positive for the further growth of Ethereum.

Liquid staking derivative projects, such as Lido DAO, Rocket Pool and related infrastructure plays – eg. SSV – have certainly been benefitting from this narrative. You can read a bit more about that here in our recent chat with Apollo Crypto.


Regulations seen as the solution, not the problem

The CoinShares report also revealed a few other eye-opening and largely bullish highlights, including the following points:

• Digital assets weighting in investment portfolios for the survey period represented 1.1% of portfolios – which is a rise from the previous 0.7% reading.

• Investors cited both “speculation and exposure to distributed ledger technology” as main reasons for their increased focus on the higher end of the crypto sector.

• Despite the FTX implosion last year, more of these big-monied clients are asking their fund managers to add to their crypto positions. There is also a decline in those who view crypto as a “reputational risk”.

• Adding to that, while regulation concerns for the industry are still present, it seems few surveyed investors expect the worst on that front – ie. political blocking from the likes of crypto haters such as Senator Elizabeth Warren, or worse, a US government ban.

According to CoinShares, this sentiment suggests investors see regulation “being the solution rather than an outright ban”.

And speaking of sentiment, have a look at how the market’s Fear & Greed Index is tracking today. Quite a bit different from where things were tracking a month or so ago…