According to a new survey by CoinShares, institutional investors are heading back to the perceived safety of Bitcoin (BTC) and Ethereum (ETH) while limiting exposure to altcoins. Some of these altcoins include XRP (XRP), as well as smart contract-enabled protocols such as Cardano (ADA) and Polkadot (DOT).
CoinShares states that the reason for this trend is the wild price swings experienced early in the year. As the leading crypto asset manager put it:
“The price swings in January and February this year have led to investor perceptions swinging back in favor of large-caps such as Bitcoin and Ethereum, at the expense of smaller caps such as Polkadot, Cardano and XRP.”
In addition, CoinShares also stated that investor sentiment in some other notable altcoins is increasingly improving. These altcoins include Ethereum rivals such as Solana (SOL), Avalanche (AVAX), Cosmos (ATOM), and Terra (LUNA). In CoinShares own words:
“Sentiment towards Solana has continued to improve while coins in the ‘other’ category grew too, notably Avalanche, Cosmos & Luna.”
Speaking on why a growing number of traditional investors are putting their money in crypto, CoinShares ascribes this to “diversification”. In addition, as digital currencies evolve further to make inroads into mainstream finance, investors are now beginning to take notice. They see the value in this new asset class and position themselves to make the most of it. However, CoinShares also pointed out that investors also view government prohibition on crypto assets as the biggest risk.
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