Institutional investors turn to competitors as Ethereum falls


As the cryptocurrency market has taken a turn for the worse, institutional investors are phasing out their investments in Ethereum. The digital asset had been the victim of multiple outflows that had sunk its AuM (Assets Under Management) total and this trend has continued this week. Instead of moving to a bigger competitor, Bitcoin, institutional investors are now moving to networks that directly compete with Ethereum.

Huge amount of money leaves Ethereum to Algorand

Algorand is one of the major competitors to Ethereum that has made a splash in the decentralized finance (DeFi) space. Because of this, more institutional investors have chosen to pitch their store with the smart contract platform. What this has led to is the movement of institutional investors away from Ethereum and towards competitors like Algorand.

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Data from last week shows that while Ethereum continues to fall out of favor with big money, Algorand has been right behind to absorb all the inflows. This made the entries in the DeFi protocol reach 20 million dollars. It is a new high for the digital asset and is evidence of the growing interest in other DeFi protocols besides Ethereum.

As for the leading smart contract platform, exits continue to rock the asset. It saw a total of $11.6 million come out last week. This has brought their year-to-date outflows to a staggering $250 million. Compared to other altcoins, Ethereum has had the worst luck among institutional investors.

Ethereum price chart from TradingView.com

ETH trading below $2,000 | Source: ETHUSD on TradingView.com

These other altcoins, which happen to be DeFi protocols, also saw inflows during the year. Solana and Tron managed inflows of $1.8 million and $0.4 million respectively, indicating that big money remains bullish on these altcoins.

Not so bad week

For other currencies in the market, the past week did not turn out to be terrible. For example, bitcoin inflows were $69 million. It may not be as high as other weeks of inflows have been, but it says a lot about how institutional investors are viewing the market even through the current downtrend. Last week’s inflows pushed bitcoin’s year-to-date inflows to $369 million, the opposite of Ethereum, which has been dominated by outflows.

One thing to note, however, is that BTC AuMs have declined to the lowest point since July 2021. This is not a direct result of institutional investors not putting money into bitcoin. Rather, it is due to the decline in the value of the digital asset in recent weeks.

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Other vehicles also enjoyed tickets in them. Multi-assets have long been a favorite of institutional investors and this shines through even in a bear market as inflows totaled $4.8 million last week. Short bitcoin entries 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 steady outflows, inflows from Europe reached $15.5 million. However, North America continues to dominate with total receipts of $72 million.

Featured image from CryptoSlate, chart from TradingView.com

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