Matt Hougan, CIO of Bitwise, recently revealed a surprising trend: many institutional investors are choosing Ethereum (ETH) as their first crypto investment, bypassing Bitcoin (BTC) altogether. This is a significant shift, as Bitcoin has traditionally been seen as the gateway to the crypto world.
Why Ethereum Over Bitcoin?
Hougan explains this trend by comparing Bitcoin to gold. He points out that most institutional investors don’t hold gold because it’s considered a niche asset. Since Bitcoin is often viewed as “digital gold,” it lacks appeal for many who already avoid gold investments.
Instead, Ethereum fits neatly into the portfolios of investors who already invest in technology. Its role in decentralized finance (DeFi), smart contracts, and Web3 makes it a more attractive option for those focused on technological innovation. The increasing use of tokenization and stablecoins further strengthens Ethereum’s position.
Institutional Investment Fuels Ethereum’s Rise
The institutional rush into Ethereum is undeniable. In August 2025 alone, Ethereum spot ETFs bought a whopping $3.87 billion worth of ETH, primarily driven by institutional investors aiming for long-term growth. BlackRock, a massive $11 trillion asset manager, led the charge, investing significantly more in ETH than in BTC.
This massive buying spree pushed Ethereum to record highs. Crucially, these purchases are largely for long-term holding, meaning less immediate selling pressure and a more stable price. If ETH closes above $4,630, it will be the highest monthly close since the 2021 bull market.
Ethereum’s Growing Ecosystem
Beyond price, Ethereum’s robust ecosystem is attracting attention. Transaction volumes soared past $320 billion, showcasing widespread use across DeFi, stablecoins, and tokenized assets. The staking mechanism, offering around 3% rewards, also appeals to institutions seeking steady returns, further solidifying Ethereum’s position as a long-term investment. With nearly 30% of the total supply staked, this aspect is attracting considerable Wall Street interest.
