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Altcoin Interest Among Institutional Investors
Recent data from CoinShares suggests that institutional investors are showing a growing interest in a wider range of altcoins, with Solana (SOLUSD) catching the eyes of hedge funds and wealth managers. According to James Butterfill, the Head of Research at the asset management firm, Solana seems to be attracting investors, as revealed in a survey involving 64 participants. Approximately 15% of these investors have already allocated funds to SOL.”
Changing Trends in the Crypto Market
Butterfill noted that XRP, once a significant player in the market, is now losing its appeal. Despite this, there have been some incoming investments totaling $1.3 million in XRP-related products. Solana currently holds the third position in terms of growth, with Bitcoin (BTCUSD) leading the pack with 41% of investors’ support. Ether follows closely behind with 30% backing, although its performance is on a downward trend.
When analyzing the percentage of cryptocurrencies in investors’ portfolios, there has been a 3% increase, a notable rise according to Butterfill. Earlier in the year, this percentage was only 1.3%, indicating a significant shift in investor sentiment. The dominance of institutional investors in the market became more pronounced after the introduction of US-based Bitcoin ETFs, with 55% of their investments channeled towards equities and stocks in the asset class.
Drivers of Crypto Investments
The growing understanding of distributed ledger technology (DLT) has been cited as one of the primary reasons why investors are entering the digital asset space, despite the higher valuations of many cryptocurrencies. The percentage of investors considering DLT expertise as a crucial factor in purchasing digital assets has increased from 15% to 20%, partly due to rising customer demands.
However, despite the overall positive outlook towards cryptocurrencies, some wealth managers and institutional investors remain hesitant about entering the asset space, citing regulatory concerns as a significant barrier. Those who have not yet ventured into crypto assets point to stringent regulations as the primary reason for their caution.
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