Coinbase Half-Year Review: Ethereum Market Growth Rate Is Three Times Faster Than Bitcoin

The Ethereum market grew three times faster than Bitcoin in the first half of 2021 as large investors diversified into the Ethereum blockchain’s native token, according to a semi-annual review [PDF] released by cryptocurrency exchange Coinbase on Monday.

Key information from the semi-annual review report:

● During the January-June period, Ethereum’s transaction volume totaled $1.4 trillion, an increase of 1,461% from the $92 billion observed in the first half of 2020.

● During the same period, trading volume of Bitcoin, the largest cryptocurrency by market value, increased by 489% to $2.1 trillion.

● Ethereum’s price performance has also outperformed bitcoin, the S&P 500 and gold, rebounding 210% in the six months to June 30. Bitcoin rose 20%, the S&P 500 rose 14%, and gold fell 6.7%.

● The report stated: "Many of our largest institutional clients, including hedge funds, endowments and corporations, increased or first-time exposure to ETH in the first half of the year, believing that the asset has comparable long-term staying power to BTC while playing a distinctive role in their portfolios"

● The report stated that the explosive growth of Ethereum-based decentralized finance (DeFi), the optimism about Ethereum's transition to a Proof of Stake mechanism, and the deflationary impact of the EIP-1559 upgrade were the reasons for the rebound in Ethereum prices.

● The Ethereum Improvement Proposal (EIP)-1559 upgrade, scheduled for August 4, will activate a mechanism to remove a variable amount of ETH from circulation every time a transaction is executed. This will curb supply growth and could give Ethereum a store of value-like appeal.