Institutional Investors Increase XRP and ADA Holdings, Dump Ethereum

CoinShares, the UK-based digital asset fund manager, recently published the results of its bi-monthly fund manager survey. According to CoinShares’ survey, institutional crypto investors enhanced their investments in altcoins like Polkadot, XRP and Cardano at the expense of Ethereum (ETH).

Bitcoin has remained the preferred crypto-asset among institutional investors despite a massive price correction. Compared to 36% in the previous survey, 39% of respondents now say that BTC has the ‘most compelling’ growth outlook.

In terms of price, BTC, ETH and XRP have lost more than 40% of their value since the start of 2022. In the past 24 hours, the crypto assets have made a comeback as XRP has climbed by 4%. Also, ETH has jumped by approximately 3%.

“The recent collapse of stable coin UST has seen investors favoring Bitcoin where 39% of respondents now say it has the most compelling growth outlook. Investors have increased weighting on digital assets from 0.5% to 1% as they look to add to positions during the price weakness. However, the weighting remains well below the 1.8% seen in November 2021. The survey highlights increasing allocation to DOT, ADA and XRP at the expense of Ethereum,” the report highlighted.

Crypto and Traditional Markets

One of the most notable developments that has happened on the Bitcoin network in the past few weeks was its relationship with traditional markets. The latest movements in the global equity market have had a significant impact on BTC’s price.

“Bitcoin now has a well-established inverse correlation to the US dollar. This makes sense due to its emerging store of value characteristics, but it also makes it incredibly sensitive to interest rates. Bitcoin’s correlation to gold has declined while it has risen significantly when correlated against equities, particularly interest rate sensitive equities such as growth stocks. In some ways, this is a correct interpretation by the market, non-yielding assets will suffer during rate hikes,” James Butterfill, the Head of Research at CoinShares, said.