Bitcoin Takes a Break as Investors Flood to Altcoins, But Which Coins are Currently Favored?
Bitcoin is still No1, but which altcoins are favorable? | Credit: Shutterstock
- The week ending July 21 saw a withdrawal of $13 million from Bitcoin investment products.
- During the same week, short Bitcoin products had outflows of $5.5 million.
- Investment instruments for Ether and XRP are booming as Bitcoin products experience a decline
There has been a discernible change in the crypto market where investors are becoming less interested in once-popular Bitcoin-related financial products and more fond of altcoins. The fact that there have been outflows for the first time since Blackrock applied to launch a spot Bitcoin ETF in June indicates that investor opinion has changed.
James Butterfill, the head of research at CoinShares, reported on July 24 that the $13 million in withdrawals from Bitcoin investment products for the week ending July 21 had reversed five weeks of inflows.
During the week, there were outflows of $5.5 million from short Bitcoin products.
In comparison, investment instruments for Ether and XRP are booming as Bitcoin products experience this decline. These alternative cryptocurrencies, which have seen a combined inflow of $9.2 million over the last week, are establishing themselves as market leaders.
Last week, Ether investing tools won the competition for best performers, bringing in $6.6 million. Following closely behind was an infusion of $2.6 million into XRP funds. Other alternative currencies, such Solana and Polygon, have also seen sizeable inflows of $1.1 million and $0.7 million, respectively.
Investor preferences have changed as a result of Ripple’s partial victory over the US Securities and Exchange Commission on July 13. The court’s crucial decision that XRP is not a security when sold to the general public on exchanges may increase investor trust.
BTC’s price is at $29,128, down 3.1% from the previous day.
Losing Interest in ETFs For Altcoins?
Since mid-June, a number of financial organizations have submitted Exchange Traded Fund applications for Bitcoin.
Since the first U.S. Bitcoin exchange-traded fund application was made in 2013, Bitcoin Exchange-Traded Funds (ETFs) have become a significant issue for the cryptocurrency industry.
As its underlying asset, a Bitcoin ETF monitors the value of Bitcoin. According to supporters of a Bitcoin ETF, a significant barrier to entry for newcomers to the cryptocurrency field is the intricacy of exchanges, digital wallets, and private keys. Without actually holding any Bitcoin themselves, these investors can gain exposure to the cryptocurrency through a Bitcoin ETF.
Bitcoin ETFs have appeared worldwide, particularly in Canada, Brazil, and Dubai, where they are regarded as significant deal. Additionally, the NYSE introduced the ProShares Bitcoin futures ETF.
Bitcoin: Still the Principal Player
Despite this brief downturn, Bitcoin maintains its hegemony in the market for digital assets. It’s $558 million in inflows in 2023 helped it reach a significant $25.0 billion in assets under management. As a result, it continues to own 67.4% of the market.
Several financial institutions have been waiting in line to submit Exchange Traded Fund applications for Bitcoin spot with the SEC during the past month. Since mid-June, the following companies have entered the race: BlackRock, ARK Invest, Fidelity, Galaxy Digital, VanEck, Valkyrie Investments, NYDIG, SkyBridge, and WisdomTree. This shows that investors continue to believe in Bitcoin’s potential.
The Bitcoin market’s evolving terrain makes for an interesting sight. Altcoins are becoming increasingly popular among investors as Bitcoin investment products experience outflows. Despite suggesting a possibly more varied future, this pattern does not seriously challenge Bitcoin’s market dominance.
What Are Other Desirable Coins?
Instead speaking about Bitcoin only, a well-known cryptocurrency analyst has forecasted brief price increases for a few altcoins, including those that compete with Ethereum (ETH), such as Polkadot (DOT), Cardano (ADA), and Avalanche (AVAX).
Crypto trader Benjamin Cowen explains to his 784,000 YouTube subscribers in a new strategy session that cryptocurrencies in 2023 are likely to follow the same trend they did in 2018, when they dramatically increased before falling down to new lows.
Cowen predicts that the current cryptocurrency rise will be similar to those in the past and will probably come to an end once Bitcoin’s (BTC) dominance level returns to its previous level.
The Bitcoin dominance (BTC.D) chart, which shows how much of the overall cryptocurrency market cap is owned by Bitcoin, is closely watched by traders. A greater BTC dominance level suggests that traders prefer the most popular digital asset over alternative currencies.
According to Cowen, several cryptocurrencies, including Polkadot, Cardano, Avalanche, and Polygon, are currently honoring their 20-week simple moving average (SMA) as resistance.
