There’s no denying that the last couple of years have seen the altcoin sector blossom and have a major impact on the crypto market at large. In fac
There’s no denying that the last couple of years have seen the altcoin sector blossom and have a major impact on the crypto market at large. In fact, a quick look at data available on Google Trends shows us that searches related to the term “Ethereum killer” have been soaring over the past 90-days, signaling a growing interest among investors in various altcoins.
In this regard, a few cryptocurrencies — such as Cardano (ADA), Solana (SOL), Polkadot’s DOT and Terra (LUNA) — have made a major market push recently. SOL, in particular, has been turning a lot of heads among investors, thanks in large part to its most recent rally, which saw the cryptocurrency surge despite the market experiencing a massive selloff.
In this regard, a few cryptocurrencies — such as Cardano (ADA), Solana (SOL), Polkadot’s DOT and Terra (LUNA) — have made a major market push recently. SOL, in particular, has been turning a lot of heads among investors, thanks in large part to its most recent rally, which saw the cryptocurrency surge despite the market experiencing a massive selloff.
In addition, there are several other networks that have shown a lot of promise. For example, following the completion of its much-hyped Alonzo hard fork, Cardano, too, has been able to record substantial profits, posting numbers of +70% and +1,200% over the last 90 and 180 days, respectively.
Demand for next-generation tokens soars
To gain a better idea of what the aforementioned developments mean for the market at large, Cointelegraph reached out to Antoni Trenchev, managing partner and co-founder of lending platform Nexo. In his view, there is growing institutional demand for coins such as Solana’s SOL and Terra’s LUNA, something that is made evident by the fact that both assets have been able to make their way into the list of top 15 cryptocurrencies by total market capitalization. Trenchev told Cointelegraph:
“This is a reflection of companies going deeper into crypto. Over the first two months of 2021, major institutions like BlackRock, Square and MicroStrategy were only just dipping their toes into Bitcoin. Now they’ve tasted its benefits and are looking to harness the untapped potential of up-and-coming blockchains and DeFi coins that could yield higher returns.”
Trenchev highlighted that such developments suggest that the crypto market may currently be in the midst of an alt-season; however, what’s different this time around is that established coins such as ETH and Bitcoin (BTC) are showing a higher level of stability in comparison to some of these newer assets. “Think of the current situation as alt season meets institutional interest, and yes, I think we will see more and more trends like this in the future,” he said.
The stability these institutions bring became fairly evident on Sept. 16 when Solana experienced a major outage wherein instead of going into a panic-induced sell frenzy, SOL barely lost any of its value, dropping less than 10%.
Solana’s run puts the market on notice
Earlier this month, institutional traders flocked to Solana as demand for Ether and Bitcoin (BTC) exposure seemed to plateau. In this regard, over the first week of September, SOL-centric investment products represented a whopping 86.6% of the total weekly inflows into the crypto investment market.
More specifically, per data made available by digital asset management firm CoinShares recently, SOL’s combined investment products witnessed inflows in excess of $49.4 million between Sept. 6 and 10. Not only that, for the week, SOL saw a 275% week-over-week increase in its value, representing 86.6% of total capital inflow into the crypto investment sector.
Lastly, other digital asset products have also continued to see major cash inflows for the fourth consecutive week, with demand for different altcoins quite easily exceeding that of BTC products, with the latter only witnessing minimal inflows of $200,000. For example, it is worth highlighting that during the first half of September, multi-asset products, XRP, Polkadot’s DOT and Bitcoin Cash (BCH) were able to register sizable financial inflows of fa$3.2 million, $3.1 million, $1.7 million and $600,000, respectively.
“Undiscovered” projects pique institutional interest
Kadan Stadelmann, chief technical officer of end-to-end blockchain infrastructure solutions provider Komodo, told Cointelegraph that rising demand for undiscovered projects is nothing new for the crypto market. However, what separates this time from previous cycles is the sheer amount of capital flowing in from institutions. He said:
“The risk is that this will lead to faster market cycles for specific cryptocurrencies that are outliers from overall market movements. We see extreme FOMO and price increases, followed by a large sell-off and price declines. With SOL, in particular, prices are down 20% this week. That doesn’t mean it won’t quickly return back to its all-time high. It’s just that people who are…
cointelegraph.com