- Ether trading volumes exceed bitcoin for the first time on Coinbase in the second quarter.
- A renewed interest in decentralized finance and NFTs, which heavily use Ethereum, has been a key factor.
- Coinbase said the launch of its staking product also drew people to the ether ahead of a key network change.
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Ether was the most traded cryptocurrency on Coinbase in the second quarter of the year, overtaking bitcoin as enthusiasm grew around decentralized finance and staking – two use cases that drew investors to the second. largest cryptocurrency in the world.
Ether trading accounted for 26% of total volumes in the second quarter, up from 21% in the previous three months, Coinbase’s second quarter results showed Tuesday.
Bitcoin transaction volumes fell sharply quarter over quarter, dropping from 39% to 24% of the total. The volumes of all other crypto assets have increased from 40% to 50%.
Total transaction volume jumped to $ 462 billion in the second quarter from $ 17 billion a year earlier, helping Coinbase’s profits exceed expectations.
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Coinbase said the growth in ether trading was driven by interest in decentralized finance (DeFi) and non-fungible tokens (NFT), two crypto applications that commonly use the ethereum blockchain. Ether is Ethereum’s native cryptocurrency.
DeFi refers to financial services that use blockchain technology to get rid of the need for centralized authorities such as clearing houses and banks. NFTs are pieces of cryptographic technology that cannot be traded with each other, on which collectibles such as art can be written.
Coinbase said the launch of its Ethereum staking product also boosted ether trading on the platform.
The ethereum network will soon shift from a “mining” system to a “staking” system, where users put forward the ether for the right to verify transactions and earn more coins. JPMorgan said the change could turn the staking industry into a $ 40 billion industry by 2025.
The launch of an Ethereum staking product in April led to the adoption of staking, Coinbase said, helping the exchange end the quarter with 1.7 million users earning a return on their crypto.
“We are seeing crypto maturing rapidly from its initial bitcoin trading use case to trading thousands of new assets, and the adoption of new use cases like decentralized finance (DeFi), non-fungible tokens ( NFT), smart contracts, decentralized autonomous organizations (DAOs) and more, ”Coinbase said in its report of the findings.