It looks like institutional investors have shifted their attention from Ethereum, the second-largest cryptocurrency by market capitalization, to competing for layer-1 blockchains. Capital inflows for altcoin investment products increased last week, while Ether-based products posted outflows for the third week in a row.
Data from CoinShares’ latest Digital Asset Fund Flows report shows that investors last week loaded up on $3.5 million worth of Avalanche (AVAX), Solana (SOL), Terra (LUNA) and Algorand (ALGO) funds while capital outflows from Ether products totalled $16.9 million.
As previously mentioned, it marks the third straight week that Ethereum products have seen outflows, bringing the total over that time to $59.3 million. This puts Ether’s Year-to-Date (YtD) outflow at 35% representing $169 million from the second-largest blockchain.
What you should know
- Asides from Ether, it looks like investors also favoured digital gold last week as flagship cryptocurrency asset, Bitcoin and its related products, saw inflows of $2.6 million, in the week in question.
- Although Bitcoin and its related products recorded a Month-to-Date outflow of $178.1 million, its YtD performance shows net accumulation of approximately $252 million.
- Over the past 10 weeks, inflows to Ethereum products have reached only $68.5 million in what could signal a bearish trend by institutions towards the major blockchain.
- Alternate layer-1 blockchains have been growing in popularity recently, and decentralized application (DApp) usage on Solana in the last seven days has increased, according to metrics from DappRadar.
- Usage for the decentralized exchange (DEX) Orca has grown nearly 43% over the week, and automated market maker (AMM) Raydium has seen a 15.5% increase, with volume in its app reaching over $1.5 billion.
- While the metrics for Avalanche’s DApp usage haven’t increased over the week, the blockchains’ investments in incentive programs and millions spent luring developers to the platform have traders bullish on the future of AVAX.
- The AVAX, SOL, LUNA and ALGO inflows were $1.8 million, $800,000, $700,000 and $200,000, respectively, while Bitcoin saw inflows equating to $2.6 million for the first time in two weeks.
Total outflows over the past three weeks have seen $219 million leave the market, with that number cooling last week winding down to just $7.2 million, a stark contrast to the $134 million which left the market in the first week of April.
Despite the recent run of outflows, the report notes that year-to-date flows remain positive with $389 million coming into crypto assets since the start of the year.