More fund managers see greater potential in the leading altcoin Ethereum than Bitcoin, according to the CoinShares report of survey data released Tuesday. According to the survey, 42 percent of investors are bullish on Ethereum. This rate is only 18 percent for Bitcoin. The findings came as the market share of Ethereum investment products increased from 11 percent at the beginning of the year to 26 percent.
More optimism for leading altcoin Ethereum, according to CoinShares report
CoinShares investment strategist James Butterfill reported that despite the bullish sentiments of respondents about Ethereum, roughly the same percentage of fund managers invested in Bitcoin. The two largest cryptocurrencies by market capitalization are at the center of digital asset investment portfolios, with allocations increasing to Cardano and Polkadot. cryptocoin.com As we reported, Jan van Eck, CEO of fund manager VanEck, said in a virtual panel last week that the big improvement for crypto in 2021 is the performance of ETH and the transition of the Ethereum network from PoW to PoS.
Competition in the Tier-1 space has increased in recent months due to lower transaction fees than the Ethereum network currently provides and increased demand for greater throughput. According to defillama.com, Ethereum’s TVL (total value locked) dominance has dropped to 68.78 percent from 98.22 percent on January 1. Buterfill said he was surprised to see less than 5 percent of respondents see growth in Solana (SOL), but he expects that number to increase in future surveys.
“While it is technically not as fast as something like Solana, they love Ethereum mainly because it is much larger and more highly decentralized,” the CoinShares strategist said. Brian Brooks, former CEO of Binance.US, on the same panel as Van Eck stated that while its tier 1 rivals battle Ethereum to become the smart contract platform king, Bitcoin will remain an allotment of cryptocurrency investors.
Who adopts cryptocurrencies and why?
According to the report, some of the respondents who have digital assets in their portfolios do not invest in crypto as a hedge against inflation. About 35 percent of investors view their investments in crypto assets as mostly speculative, while 25 percent see it as a diversification tool. The report revealed sharp contrasts in allocations to cryptocurrencies from different types of investors.
Family offices have the highest allocation of crypto at 23 percent, while wealth managers surveyed allocate just 0.1 percent to digital assets, with individual and institutional investors hesitant. Of those surveyed who said they were not investing in crypto, 21 percent said the main reason was regulation, while 19 percent cited institutional restrictions. Policy, government bans and regulations account for 58 percent of the perceived core risks for cryptos. About 15 percent reported volatility as a significant risk.
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