A recent crypto rally has largely favored altcoins, with most of the top tokens outpacing their bigger competitors Bitcoin (BTC) and Ethereum (ETH). Institutional buying, which is a key factor behind the rally, could rise in the coming weeks.

Top altcoins rose on Friday after exchange operator CME Group said it launched indices and price indicators for 11 tokens in the space.

Most of the 11 tokens listed by CME also posted strong gains in the past 24 hours.

The planned indices are likely to spur the creation of more financial instruments around altcoins, which is expected to drive capital inflows into the tokens.

CME announces increased interest in altcoins

Most of the 11 tokens, including majors like Solana (SOL), Cardano (ADA), Polygon (MATIC) and Uniswap (UNI), were up between 0.1% and 3% on Friday.

SOL outperformed the 11 altcoins backed by CME, gaining around 2.8%. The gains helped the token regain its spot as the sixth largest cryptocurrency after being briefly dethroned by Terra (LUNA).

Bitcoin Cash (BCH), the smallest member of the party, lagged its competitors and traded negatively for the day.

CME – the world’s largest commodities trader – is by far the largest newcomer to altcoin indices. The space was further dominated by relatively smaller crypto exchanges or asset managers.

As such, the move is expected to boost a large number of new altcoin-based derivatives. CME’s Bitcoin futures index is the foundation for all Bitcoin ETFs available in the United States.

Institutional demand is steadily increasing

Trading by investment houses has become a major factor in how a token’s price performs. The trend has been visible since late 2020, when an influx of capital pushed the price of Bitcoin up more than 1000% in a year.

But as investments in the world’s largest token slowly become more saturated, altcoins offer better returns. This has led to a steady influx of institutional trading this year.

A recent report from asset manager CoinShares showed that crypto assets have seen eight out of thirteen weeks of capital inflows this year.

Disclaimer

The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.

About the author

With over five years of experience in global financial markets, Ambar plans to leverage this knowledge for the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments could affect crypto markets and what that could mean for your bitcoin holdings. When he’s not scouring the internet for the latest news, you can watch him play video games or watch Seinfeld reruns. You can reach him at [email protected]



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