Bitrabo Editorial
Recent data from CoinShares provides insight into how institutional investors are currently engaging with altcoins, including XRP, Solana, and Cardano. While Bitcoin saw the majority of the investment activity, the report reveals varying trends in altcoin investments, reflecting distinct preferences among investors. Notably, Ethereum and Cardano experienced significant outflows, whereas XRP and Solana attracted more investment.
Investments in XRP, Drops in Cardano and ETH
According to a report by CoinShares, digital asset investment products experienced inflows totaling $321 million last week, marking a second consecutive week of investment growth. This uptick was echoed in the positive price movements of various cryptocurrencies, mainly motivated by the Federal Open Market Committee’s (FOMC) recent decision to lower interest rates by 50 basis points. This monetary policy shift sparked notable interest from U.S. investors, leading to a 9% increase in total assets managed by crypto funds.
Bitcoin led the investment surge with an impressive inflow of $284 million, even as there was a concurrent $5.1 million inflow into short Bitcoin investment products, indicating that some investors are hedging against potential market downturns.
In contrast, Ethereum continued its trend of steady outflows for the fifth week, primarily influenced by the Grayscale Ethereum Trust, resulting in outflows of $28.5 million last week and a worrying total of $145.7 million for the month.
Despite Ethereum’s challenges, the bearish sentiment surrounding it didn’t affect interest in other cryptocurrencies. XRP drew in $0.1 million last week, spurred by the launch of Grayscale’s XRP trust. Likewise, Solana and Litecoin enjoyed additional inflows of $3.2 million and $0.1 million, respectively. Multi-asset investment products were particularly successful, attracting $54.2 million in inflows, offsetting the losses from Ethereum. In contrast, Cardano’s investment products were less fortunate, experiencing outflows of $0.2 million.
Future Outlook for Institutional Investors
The recent positive inflow trend may just be the start of a larger movement as the cryptocurrency market appears to be shifting towards a bullish phase, with long-term corrections possibly coming to an end.
Currently, Bitcoin seems to be on the verge of a bull run, supported by promising on-chain metrics and the anticipation of further interest rate reductions by the Fed. Institutional interest is crucial for this potential bull run, as substantial inflows are likely to positively influence Bitcoin’s price. This could also lead to increased investment in altcoins, and it’s possible that Ethereum will see a resurgence in institutional interest in the coming weeks.