A Coinshares data revealed that there were $1.4m inflows into Cardano this past week. Thus, making it the first time it will top other crypto investment products in terms of institutional investors in two and a half months.
Inflows And Outflows In The Digital Asset Market
It is also the first time its native token ADA will trade above $2. Other analytics further reveal that ADA is now the third biggest digital currency, replacing Binance coin, which occupied that spot before now.
By comparison, POL and XRP also had some inflows, but they weren’t as significant as ADA. Polkadot experienced $0.5m inflows, while ripple had $0.4m. However, it was another week of significant outflows for the remaining virtual asset investment products. Coinshares report that about $25m outflows were recorded across all digital asset investment products, making it the sixth successive week there will be these significant outflows in the cryptocurrency asset space.
Also, it is the longest run of consecutive outflows for three years now. The total outflows for these six weeks are now almost $117m. It is remarkable to note that there was 6% asset under management (AUM) during that period three years ago, while the AUM during this year’s run is only 0.3%.
Negative Market Sentiments
Top crypto analyst at Coinshares, James Butterfill, opined that the combination of these huge outflows and low investments, which usually happen during this period, led to the current market bias. “The recent price increases indicate a bias recovery across the entire digital asset industry. Thus, there is a 10% week-on-week increase and an aum of a little under $56m,” Butterfill concluded.
Remarkably, outflows from the king coin were the highest, and it was about $23m this past week. Ethereum accounted for $1.2m, while the other asset accounted for $0.5m – a first in almost one year. But Butterfill was quick to add that the huge Bitcoin outflow doesn’t have any huge ramifications, as this has always been the case in the last couple of years.
Alonzo Upgrade Almost Completed
Investors seem attracted to Cardano as its Alonzo purple upgrade is almost completed. Cardano’s upgrade started with the Alonzo blue two months ago and will be concluded with the purple by the middle of next month.
The completion of these upgrades will turn Cardano into a complete smart contract platform. Hence, the project can become a decentralized finance network since developers can create applications on it. Cardano’s concept of creating more awareness for the project has led to a 41% rise in the ADA price in the last seven days.
Some crypto enthusiasts suggest that Cardano may eventually replace Ethereum as the second biggest cryptocurrency and a leader in decentralized apps. Ethereum is yet to find the right solution to the high gas fees, slowness in transactions, and lack of scalability plaguing the platform despite having the highest number of Dapps on its network.
One other advantage of Cardano over Bitcoin and Ethereum is its environmental friendliness. There are no worries about environmental pollution when it comes to ADA mining. Thus, Cardano has a unique opportunity over the top two digital assets and might probably overtake them sooner than expected.
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