As the crypto market has taken a turn for the worse, institutional investors are phasing out their investments in Ethereum. The digital asset has been the victim of several outflows that reduced its total AUM (assets under management) and the trend continued this week. Instead of moving to a major competitor, bitcoin, institutional investors are now turning to networks that are in direct competition with Ethereum.
Big Money Leaves Ethereum for Algorand
Algorand is one of the major competitors to Ethereum which is making waves in the decentralized finance (DeFi) space. Due to this, more institutional investors are choosing to pitch their tents with smart contract platforms. This has caused institutional investors to exit Ethereum and move on to competitors such as Algorand.
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Data from the past week shows that while Ethereum continues to fall in favor of big money, Algorand has been right behind it to soak up all the inflows. This brought inflows to the DeFi protocol to $20 million. This is a new high for digital assets and is evidence of the growing interest in DeFi protocols other than Ethereum.
For the leading smart contract platform, the outflow continues to shake the asset. It saw total withdrawals of $11.6 million last week. This has generated its year-over-year outflow of a staggering $250 million. Compared to other altcoins, Ethereum has had poor luck among institutional investors.
ETH trading below $2,000 | Source: ETHUSD on TradingView.com
These other altcoins, which have DeFi protocols, also registered inflows for the year. Solana and Tron managed inflows of $1.8 million and $0.4 million, respectively, indicating that these altcoins remain bullish on the big money.
not a very bad week
The last week proved not to be a terrible one for other coins in the market. For example, the inflow of bitcoin was $69 million. This may not be as high as other weeks of inflows, but it gives an indication of how institutional investors are viewing the market even through the current downtrend. Last week’s inflows pushed bitcoin’s year-on-year inflows to $369 million, in contrast to Ethereum, which has been dominated by outflows.
One thing to note, however, is that BTC’s AUM has dropped to its lowest level since July 2021. This is not a direct result of institutional investors not investing money in bitcoin. Rather, it is due to the decline in the value of the digital asset over the past few weeks.
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Other vehicles also enjoyed their influx. The multi-asset has been a longtime favorite of institutional investors and has also shone in a bear market as it saw total inflows of $4.8 million last week. Short bitcoin inflows also reached $1.8 million.
Across the pond, the European market is beginning to see a light at the end of the tunnel. After more than a month of continuous outflows, Europe’s inflows reached $15.5 million. However, North America continues to dominate, with total inflows reaching $72 million.
Featured image from CryptoSlate, chart from TradingView.com
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