In a recent survey conducted by CoinShares, fund managers have identified Ethereum ETH -1.70% as the digital asset with the most compelling growth prospects at present.
The survey, which queried digital asset fund managers on their views regarding the most promising digital assets, found that nearly 45% of respondents pointed to Ether, the native cryptocurrency of the Ethereum network.
This preference for Ethereum over other cryptocurrencies comes at a time when the digital asset industry is experiencing significant growth and transformation. Ethereum, known for its smart contract capabilities and as the backbone for a vast majority of decentralized applications, has been at the forefront of the decentralized finance (DeFi) and non-fungible token (NFT) movements, which have both seen explosive growth over the past year.
In comparison, approximately 39% of the survey participants believe that Bitcoin BTC -0.52%, the original cryptocurrency and the largest by market capitalization, holds the most growth potential.
Bitcoin has long been considered a digital gold and a hedge against inflation by many investors, but the survey suggests that Ethereum’s diverse use cases may be drawing more attention from fund managers looking for growth rather than just value preservation.
A smaller faction of fund managers, around 6%, showed a preference for Solana SOL 3.79%, a blockchain platform known for its high throughput and lower transaction costs. Solana has been gaining traction in the digital asset space as a competitor to Ethereum, especially in areas where faster transaction speeds and scalability are critical.
The survey’s findings reflect a broader trend in the digital asset market, where investors are increasingly looking beyond Bitcoin for opportunities. Ethereum’s transition to a proof-of-stake consensus mechanism through its upcoming upgrades, commonly referred to as Ethereum 2.0, is anticipated to address issues of scalability and energy consumption, further bolstering its attractiveness to investors.
The interest in Ethereum is also reflected in the asset’s financial metrics. Over the past year, Ethereum has seen a substantial increase in its total value locked (TVL) in DeFi protocols, indicating a growing confidence in its underlying technology and its use case as a decentralized settlement layer.
Moreover, the number of active Ethereum addresses and the volume of transactions on the network have continued to rise, suggesting a robust and growing ecosystem. The network’s ability to facilitate a wide range of decentralized applications has led to a surge in developer activity, with an increasing number of projects choosing to build on Ethereum.
The CoinShares survey underscores a shift in the sentiment of institutional investors, who are now looking at the long-term potential of digital assets beyond mere speculation. The data points to a maturing market where fundamentals such as network effects, technological advancements, and real-world applications are becoming key drivers of investment decisions.
