As observed by crypto asset manager CoinShares, last week saw a fascinating flip in the cryptocurrency market as investors turned their attention away from Bitcoin (BTC), instead preferring to dive into the pool of smaller cryptos, including ether (ETH) and Ripple’s XRP, truncating BTC-focused funds by a hefty $13 million. This break in trend confounded some, as the previous four weeks saw digital asset funds reaping a bountiful $742 million in inflows, only to face a decline of $6.5 million last week.
The sudden switch, it seems, may be due in part to an oversaturation of positive news surrounding BTC over the past weeks that, although initially spurred investors to stack their funds behind Bitcoin, may have left them feeling that the plateau had been reached too swiftly. Particularly compelling was giant BlackRock’s application for a much-desired spot on the BTC trading block by June 15, enticing investors to channel funds into BTC-focussed investment options at breakneck speeds, a spectacle unseen since October 2021.
The fluttering attention of investors was not entirely without cause, as altcoins – the alternative crypto assets to Bitcoin – gained momentum following the partial victory of XRP over the U.S. Securities and Exchange Commission (SEC) earlier this month. This court decision not only positively pushed XRP’s price to a new high for the year but also ignited renewed investor confidence in altcoins, as reflected in the positive fund flows sustained throughout last week.
The shift in focus towards altcoins was led by ETH-focused investment products, which saw the largest inflows out of all cryptocurrencies, amassing a total of $6.6 million. According to James Butterfill, head of research at CoinShares, this bourgeoning growth hints that “sentiment, which has been poor this year, is beginning to turn around” for ETH.
There was also a remarkable surge into XRP funds, which amassed a decent $2.6 million, accounting for 8% of all assets under management inflows for the last 11 weeks. This, as per Butterfill, indicates growing investor assurance in XRP’s prospects. Additionally, investment products associated with relatively smaller altcoins, including Solana’s SOL, UniSwap’s UNI, and Polygon’s MATIC, enjoyed inflows of $1.1 million, $0.7 million, and $0.7 million respectively.
All in all, last week offered a captivating play within the crypto market. As the attraction to altcoins continues to solidify, and blockchain technology relentlessly pushes its boundaries, it seems that investors are more willing than ever to spread their bets across a wider cryptocurrency landscape.
Source: Coindesk
