Altcoins Attracting Institutional Investors Despite Bitcoin and Ethereum Dominance
• David Duong, Head of Institutional Research at Coinbase, discussed the crypto market performance over the past year.
• He noted that institutional investors are still paying attention to altcoins despite Bitcoin and Ethereum remaining on top.
• Macro conditions for risk assets including crypto are neutral at the moment but could weaken in the second quarter with debt ceiling issues.
Altcoin Markets Attracting Institutional Investors Amid Bitcoin & Ethereum Dominance
Bitcoin & Ethereum Still On Top
David Duong, Head of Institutional Research at major crypto exchange Coinbase, recently participated in a discussion with popular crypto analyst Scott Melker. During this discussion, he noted that while bitcoin (BTC) and ethereum (ETH) remain the top coins, altcoins are still drawing significant interest from institutional investors.
Macro Conditions Neutral For Risk Assets
Duong argued that what he is currently seeing in terms of flows on the exchange from Coinbase’s institutional clients is that 55% of it is still on bitcoin and ETH — meaning there is still a lot of attention being paid to other cryptos outside of just Bitcoin and Ethereum. He also noted that what we are currently witnessing in the market is a lot more macro-focused due to seasonal trends such as bonus payments being put into personal pension accounts and taxes being cut for tax season. Therefore, Duong said macro conditions for risk assets including crypto are neutral at the moment but could weaken in the second quarter due to debt ceiling issues.
Smaller & Quicker Altcoin Narratives
Melker commented that mini-narratives related to altcoins seem “much smaller and quicker bubbles than the altcoin narratives we used to see in the past,” suggesting people are simply moving quickly between different cryptos without any new money coming in.
Institutional investors remain interested in altcoins despite Bitcoin and Ethereum’s dominance over other cryptocurrencies. That said, current macro conditions for crypto appear to be neutral but could potentially weaken during Q2 2021 due to debt ceiling issues. Furthermore, mini-narratives related to altcoins have become smaller and quicker bubbles than they used to be as people move quickly between different cryptos without any new money coming in.