The Canadian Purpose Group Ether ETF has breached 50,000 ETH worth $122.7 million in AUM even when the price of the second largest cryptocurrency has registered a 50% decline from the top during the recent market correction. The Ether ETF was launched by the firm on April 20 and in just over a month it has reached a major milestone indicating high institutional demand for the second-largest cryptocurrency.
Eth is currently trading just above $2,400 with a price decline of 2% over the past 24-hours. Ether’s institutional demand has peaked this bull season and some of the top financial giants including the likes of JP Morgan and Goldman Sachs have heaped praises for the second-largest digital asset and even claimed it has the potential to unseat Bitcoin as the store of value.
Purpose Group also launched the world’s first Bitcoin ETF in February this year which turned out to be a success as well and currently holds over 19K Bitcoin. The Canadian firm offers institutional investors to invest in physically settled Bitcoin contracts held in cold storage by the firm.
What is Fueling Ether’s Demand?
Ether this bull season has overcome many short-term hurdles like spiking gas fees and network congestion to rise over 3X its 2017 high. Even when the gas fee problems in March made many speculate whether Ether would be able to overcome the network scalability issue, it has risen not just in value but also in demand. The growing value of Ether locked in ETH 2.o staking contracts along with declining exchange supply has fueled its demand and price in recent times.
The approval of EIP-1559 for the July upgrade would limit the miner’s fee and hopefully resolve the growing gas fee issue on the network has also helped the second largest crypto asset to gain confidence among institutional investors. While the US regulators are yet to approve a Bitcoin ETF, the North American counterpart has approved multiple Bitcoin and Ether ETFs which has become an instant success indicating the rising demand for such products.