Institutional investors have warmed to the idea of investing in crypto in recent years. In fact, in 2021 we have seen an increase in institutional capital in crypto, and this is expected to continue for the long term. After all, cryptocurrencies are now a serious asset class for all investors. Here is why this trend is very important for retail investors:
Institutional investments in crypto are likely to be long term, and as such there is the potential for increased asset values.
The flow of institutional money gives the crypto more credibility, which attracts more individual investors.
However, institutional capital does not circulate in all assets in fact, only a selected list of cryptocurrencies benefit from it.
At first glance, you would expect Bitcoin (BTC) be an obvious choice for institutional money. But this is not true. Although Bitcoin is still an important part of crypto, most institutional investors are fond of these two coins:
Ethereum (ETH) is the second largest crypto by market capitalization. The main reason the coin attracts many investors, not just institutional investors, is based on its overall ecosystem. Ethereum provides a platform where developers can launch decentralized applications.
Data source: Tradingview.com
In fact, thousands of new projects have been launched on Ethereum, and the channel accounts for the highest percentage of new DApps on the market. This makes it a crucial driver of blockchain technology and innovation in the future.
Cardano (ADA) is also a scalable blockchain that uses proof of stake consensus to validate transactions. Like Ethereum, the chain also provides an efficient platform where developers can launch DApps.
Cardano was founded in 2017 and has since grown into one of the world’s most valuable blockchains. It is also arousing the interest of institutional investors. At the time of writing. ADA was selling for $ 1.34 with a market cap of $ 44.7 billion.