- The recent CoinShares report indicates a shift in institutional interest from Bitcoin to altcoins, especially XRP and Cardano, which witnessed substantial investment inflows.
- Cardano has been recognized for its high ESG score, an indication of sustainable investing, which may contribute to its growing appeal among institutional investors.
Bitcoin Loses its Lustre as XRP and Cardano Step into the Limelight
In a significant trend reversal, long-Bitcoin investment products have accounted for 93% of cryptocurrency investment product outflows. In contrast, short Bitcoin products marked their 14th consecutive week of outflows. Altcoins such as XRP and Cardano, however, saw significant investment inflows.
CoinShares’ latest Digital Asset Fund Flows report notes that altcoins seem to be the preferred choice among institutional investors over the past week, with Ethereum being the notable exception. Altcoins recorded inflows of $3 million last week and a total of $19 million over the past eight weeks.
Investment Shift: From Bitcoin to Altcoins
Investment funds focusing on Cardano, Solana, and XRP attracted substantial interest, securing $640,000, $600,000, and $500,000 respectively from investors. Conversely, Ethereum-focused funds experienced $1.9 million in outflows, and Avalanche investment funds saw $400,000 leave their coffers.
The wider digital asset investment product market witnessed a slight pullback, with minor outflows amounting to $21 million last week. Trading volumes for these investment products dipped to $915 million for the week, a significant fall from the $1.5 billion weekly average observed throughout this year.
This reduction in trading volumes reflected a broader trend in the Bitcoin market, which saw only $16 billion traded last week on trusted exchanges, a significant decline from the $52 billion weekly average for the year to date.
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However, despite the subdued market activity, digital assets attracted nearly $500 million of inflows in the first half of the year. It’s worth noting that last week, North America became the focal point of negative sentiment, witnessing $11 billion of outflows.
Investment inflows into XRP and Cardano may be driven by a recent federal court ruling, which established that XRP is not necessarily a security. This prompted investors to lean into the token as it was relisted on several major exchanges.
Cardano’s ADA may have also benefited from this ruling, as it was previously named a security in lawsuits filed by the U.S. Securities and Exchange Commission (SEC) against top cryptocurrency exchanges Binance and Coinbase.
Boosting Cardano’s appeal further, it was named one of the top cryptocurrencies in terms of its ESG (Environmental, Social, and Governance) score in CCData’s ESG Benchmark report. With sustainability becoming an increasingly critical factor for investors, this recognition may serve to enhance Cardano’s allure among institutional investors.
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