As Ethereum falls in value, institutional investors are turning to competitors.
Institutional investors are phasing out their Ethereum investments as the crypto market has taken a turn for the worst. Multiple outflows hit the digital asset, causing its total AuM (assets under management) to plummet, and the trend has persisted this week. Institutional investors are already flocking to networks that compete directly with Ethereum, rather than shifting to a larger competitor, Bitcoin. Algorand is a main rival of Ethereum, a decentralized finance (DeFi) platform that has been making headlines. As a result, more institutional investors have chosen to set up shop on the smart contract platform. As a result, institutional investors are moving away from Ethereum and toward competitors like Algorand.
While Ethereum continues to lose favor with institutional investors, Algorand has been close behind it, soaking up all of the inflows. Inflows into the DeFi protocol reached $20 million as a result of this. It’s a new high for the digital asset, and it shows that interest in DeFi protocols other than Ethereum is rising. Outflows continue to wreak havoc on the major smart contract platform. Last week, it saw a total of $11.6 million left. This brings the company’s year-to-date outflows to a whopping $250 million. Ethereum has fared the worst among institutional investors when compared to other cryptocurrencies. Last week was not particularly bad for other currencies on the market. Inflows into bitcoin, for example, totaled $69 million. It may not be as strong as previous weeks’ inflows, but it says a lot about how institutional investors regard the market, even as it continues to fall. Bitcoin’s year-to-date inflows have reached $369 million, in contrast to Ethereum, which has been driven by withdrawals. However, it’s worth noting that BTC’s AuM has dropped to its lowest level since July 2021. This is not due to institutional investors refusing to invest in bitcoin. Rather, the drop in the value of the digital asset during the previous several weeks is to blame.
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