In a recent talk with CNBC Squawk Box host Andrew Sorkin, the chief financial officer of leading U.S.-based crypto exchange Coinbase named three reasons why she believes the Ethereum trading volume has been outpacing that of Bitcoin in the first quarter of 2021.
Besides, she reckons that institutional investors on Coinbase will be more active than retail ones.
Three reasons for ETH to surpass BTC in trading volume
The CFO of Coinbase Alesia Haas believes that the growth of Ethereum trading volume versus that of Bitcoin comes down to three reasons: the growth of the non-fungible token industry on Ethereum, the increasing volume of ETH locked in the Ethereum 2.0 deposit contract and the gradual transition of the network to the proof of stake (PoS) consensus algorithm from the proof of work (PoW) one.
"First quarter for us where #ethereum surpassed #bitcoin trading," says $COIN CFO Alesia Haas. "That was really grown this quarter by the growth of #NFTs...also, we saw Eth2 staking and the network is transitioning now to a proof of stake from a proof of work network." pic.twitter.com/ESYwT0V036— Squawk Box (@SquawkCNBC) August 11, 2021
Coinbase likely to shift to more institutional money in the future
When asked whether Coinbase is going to see more inflows of institutional money or cash from retail investors, she said that it is likely to be institutional ones.
As per Haas, Coinbase is "building deep roots" at the moment with their institutional clients—which include Elon Musk's Tesla and SpaceX—looking for custody services and continuing to invest in crypto.
The CFO stated that institutions appreciate that Coinbase has taken care of security with large investments and the fact that Coinbase has never suffered a hacker attack and never lost any of its investors' crypto since the exchange began operating.
After institutions receive crypto custody services, they go into trading on Coinbase, buying data services and then moving into the borrow-lend crypto products that Coinbase has been deploying.
"We are really building deep roots with a lot of our institutional clients across their investing needs in the crypto economy," says $COIN CFO Alesia Haas. "I think we will shift into more institutional money as we go forward." pic.twitter.com/wo3UodB2o8— Squawk Box (@SquawkCNBC) August 11, 2021