Despite recent correction in prices of cryptocurrencies including Bitcoin, crypto investors have continued to back them in the past week. In fact, investments into digital assets were marginally up from $151 million during the second week of November to $154 million last week “with the most recent price correction, where Bitcoin prices fell by 12 per cent over the week, seemingly not impacting the positive investor sentiment,” according to the data from digital asset management firm CoinShares’ weekly report on digital asset fund flows.
As per CoinGecko, Bitcoin had dropped over 12 per cent in the past seven days along with all major altcoins including Ethereum (10.4 per cent), Binance Coin (11.6 per cent), Solana (10.3 per cent), Cardano (12.2 per cent), XRP (12 per cent), Polkadot (13.5 per cent), Dogecoin (15.3 per cent), while Avalanche had reported a jump of 39 per cent in price, at the time of writing this report.
“Volatility is a part of any market, but informed investors do stand by a particular coin when they understand what is the utility of the project and the technology behind it. Also, it’s good to see that more and more people are realizing that cryptos are the future and that’s the reason why we are seeing increased participation in the crypto market,” Kumar Gaurav, Founder and CEO, Cashaa told Financial Express Online.
Bitcoin continued to witness the majority of inflows last week totalling $114 million up from $98 million in the preceding week. This has helped it retain assets under management (AuM) share of 67 per cent over the last month amongst investment products. Although this wasn’t reflected in market prices, with Bitcoin dropping 4 per cent over the month in comparison to Ethereum that jumped 14 per cent during the same period. This disparity, said CoinShares, may be due to the recently launched ETFs in the US where investment products saw 90 per cent of inflows.
Inflows into altcoins last week were led by Ethereum with $12.6 million followed by $8.5 million into Solana, $5 million into Polkadot, and others. “Inflows into world computer assets suggest that investors favour Solana,” the report noted. Solana recorded $43 million inflows over the last month versus Cardano at $23 million. Few altcoins including Cardano had reported minor outlaws for the time first time in many months. Last week outflows for Cardano stood at $2.1 million.
“The speed, efficiency and cost-effectiveness that it (Solana) offer seem to be getting it the favour from investors. The recent fundraise that it did last month has further given it momentum. There are a couple of positives that it has over other competing platforms- it works on proof of history vs proof of stake, scalability, among other reasons. Its fee is much lower than that of Ethereum, which is the biggest exchange, and that is a major advantage,” added Gaurav.
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