Institutional fans of altcoins, according to Okcoin
According to Okcoin, institutional investors are increasingly present in the ecosystem. Their number on the platform would have increased by + 450% between September 2020 and September 2021. The associated trading volume increased by + 124%.
This growing interest from “goofs” runs across all areas of cryptocurrency, so it’s no surprise. But what is notable is that the latter have been mainly interested in altcoins this year, again according to the exchange platform.
On Okcoin, 53% of purchases by institutional investors would have concerned altcoins in 2021. They would have shown “a greater appetite for crypto assets other than Bitcoin”.
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“Young” altcoins are popular with institutional investors
Okcoin notes that the old hands of cryptocurrency are no longer particularly favored by institutions, who often prefer younger projects. It’s a big change. The exchange explains that in 2020 and before, “institutions favored exclusively altcoins that were at least four years old, such as Ether and Litecoin.”
Among the “young” assets who have managed to make the eyes soft to institutional, we find the MiamiCoin (MIA), the cryptocurrency of the city of Miami. We also note the presence of Avalanche (AVAX) in the portfolios of this category of investors.
Okcoin also explains that the trend is found beyond its own platform:
“Institutional activity on the platform is indicative of macro sentiment among large-scale investors, with a client base that includes asset managers, venture capitalists, investment funds, brokers, processors. payment and other entities. “
A fundamental trend?
The trend had already been noted by Coinshares, which tracks institutional capital flows, over the past summer. If we look at the past week, however, we see that Bitcoin has been the undisputed king.
According to the latest data shared by Coinshares, Bitcoin-related investment products totaled 99% of all capital inflows over the past week. This is of course due to the approval of a Bitcoin ETF by the SEC.
Capital flows by crypto asset – Source: Coinshares
If we ignore this one-off event, we see that the altcoins that most interested institutional investors over this period are Solana (SOL), Cardano (ADA), as well as Binance’s BNB. These are relatively recent projects, at least when compared to Ethereum (ETH) or Litecoin (LTC).
👉 To learn more – ProShares Bitcoin ETF achieves second biggest launch in history
This new interest can be compared to the underlying trends that we have seen in the crypto ecosystem since the start of the year. The arrival of solutions external to Ethereum has been particularly commented on, and with it new projects that have emerged as potentially viable alternatives.
But we should not underestimate the weight of Ethereum, which alone carried the initial explosion of the non-fungible token (NFT) sector, as well as part of decentralized finance (DeFi).
It will therefore be interesting to see if successive Bitcoin ETF approvals will continue to attract big pennies to BTC, or if the redistribution of flows to altcoins will continue.
👉 Also read – Against Ethereum (ETH), “killers” and second-layer solutions are on the rise
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About the author: Marine Debelloir
Deputy Editor-in-Chief on Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that arise from the blockchain and I like to find the most delicious information to share with you.
All articles by Marine Debelloir.