According to a recent study of investor sentiment, 43% of respondents chose Bitcoin above Ethereum as the cryptocurrency with the most promising development prospects.
Nevertheless, Ethereum continues to keep the top spot in investors’ portfolios despite this shift in mood. Investors appear to be putting more money into alternative cryptocurrencies (altcoins), such Layer 2 solutions and liquid staking derivatives, which experienced an increase from last month to 10%.
Despite its second-place reputation, Ethereum continues to have a prominent position in investment portfolios. Investors are reportedly lowering their holdings of both Ethereum and Bitcoin in favour of alternatives like Polkadot, Cardano, and the XRP token connected with Ripple. Despite this change, it’s important to remember that total positioning has decreased, which may be related to the relative price weakness of these “other” altcoins.
The weighting of digital assets in portfolios had a notable decline over the survey period, dropping from 1.8% in April to 0.7% at the end of June.
But in the last three weeks, there has been a noticeable uptick in investment, with a major inflow of over US$470 million, a significant improvement from the US$400 million outflow seen in the first half of 2023. The latest BlackRock ETF filing is probably to blame for this abrupt shift in perception.
The rising interest in digital assets is mostly due to the projected rise of distributed ledger technology (DLT), which accounts for 37% of all justifications for portfolio additions.
As a safe haven, investors are diversifying into digital assets, a view that first surfaced during the recent financial crisis in the United States. Despite this, investors continue to face risks from regulation and future government restrictions, particularly in light of recent saber-rattling from the U.S. SEC.
