Institutions Bullish on ETH Price Growth in 2023, Survey Finds
Two-fifths of surveyed institutions expect the price of ETH to be above $2,000 at the end of 2023, citing increased adoption of the asset after the Merge
Dan74/Shutterstock.com modified by Blockworks
Two-fifths of institutions expect the price of Ethereum’s native token ether to be above $2,000 at the end of 2023, according to a survey.
Conducted by London-based crypto hedge fund firm Nickel Digital Asset Management, the research, published Thursday, polled 200 institutional investors and wealth managers across seven countries that manage a combined $2.85 trillion in assets.
While 41% of institutions said they expected ether (ETH) to be above $2,000 at the end of 2023, 72% predicted growth from its level of $1,254 when the research was conducted.
ETH’s price stood at about $1,725, as of Thursday, at 11 am ET — up about 8% in the past 24 hours.
The expectation for positive price action comes after Ethereum’s move to proof-of-stake last year — an event estimated to reduce the blockchain’s energy consumption by as much as 99.9%.
Industry participants told Blockworks last year the Merge “completely changes” ETH’s investment case, adding that the staking yields investors can now earn from the asset were poised to bring in institutional capital.
Roughly 85% of the survey respondents were aware the Merge took place, with 77% saying they believed it would increase adoption.
Read more: The Investor’s Guide to the Ethereum Merge
Nickel Digital CEO Anatoly Crachilov said Ethereum is benefitting from what he called “the flight to quality” in the crypto space.
“It is amazing to see so many traditional investors not only cognizant of the Merge, but aware of its mechanics and the benefits that came with the upgrade,” he said in a statement. “This can only be a positive for the space and especially the DeFi sector, which lives primarily on Ethereum.”
Isidoros Passadis, master of validators at liquid staking protocol Lido, told Blockworks the rollout of Ethereum’s highly-anticipated Shanghai upgrade will bring many benefits to Ethereum’s staking ecosystem.
“By allowing for withdrawals, the Beacon Chain de-risks liquid staking thereby opening it up to a wider set of stakers with lower-risk appetites,” Passadis said.
Colin Butler, global head of institutional capital at Polygon Labs, added: “We’re hearing anecdotally that many institutions are waiting for Shanghai since it’s impossible to underwrite duration currently. If you can’t unstake and your [limited partners] start trying to redeem, you could face a pretty toxic liquidity crunch, so post-Shanghai, this risk is lessened.”
Nickel Digital Asset Management’s research comes a few days after a study by blockchain-based finance firm Avantgarde found that 74% of institutional investors plan to increase their use of DeFi this year.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- The Drop: Apps, games, memes and more.
- Lightspeed: All things Solana.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
