Back to bitcoin and Ethereum: Investors prefer crypto above altcoin

Various headwinds have had a significant impact on digital assets, either directly or indirectly, around the world.

These range from concerns about inflation to EU anti-crypto measures to government bans. Investors desire to decrease their exposure to risky assets for a variety of reasons.

Value-based coin

As a result of price fluctuations in January and February, investor sentiment has altered again this year, with high-capitalization assets such as Bitcoin and Ethereum being preferred. In a report published on March 29, CoinShares, a well-known crypto asset management firm, examined this issue.

According to the study, investors returned to Bitcoin (BTC) and Ethereum (ETH), while reducing their exposure to altcoins. Alternative tokens include Cardano (ADA) and Polkadot, two blockchains with smart contracts (DOT).

Investors are investing money into cryptocurrencies because they perceive value in the new asset class, which is intriguing to observe.

Despite this, a few cryptocurrencies have recently garnered headlines. The stock prices of Solana (SOL), Avalanche (AVAX), Cosmos (ATOM), and Terra (LUNA) have all lately increased. The primary motivation for investors to add such altcoins to their portfolios is to diversify their holdings.

Crypto is still going strong

Cryptocurrencies have received a lot of love and admiration – that is a reality. Regulatory reprimands, on the other hand, have caused major obstacles along the route. As a result of the political climate, investors have cut their holdings in digital assets.

Government restrictions, of course, were at the top of the list of critical issues.

According to the CoinShares poll, the largest risk in the eyes of investors is the government banning of crypto assets.

“This poll was taken in March 2022, during which a vote in the European Union parliament raised fears about a Proof of Work (PoW) ban. There’s also the build-up to President Biden’s executive order.”

The average weighting of digital assets in a portfolio fell from 0.8 percent to 0.5 percent. The report claimed that when viewed in conjunction with the money flows,

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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing