Institutions Shift Their Interest from Bitcoin to Ethereum and DeFi

Institutional investors have shifted some of their attention to alternative investment options, as a CryptoCompare report suggests. According to market analysis, Bitcoin-based product dominance dropped by 7%.

While the overall growth of institutional investments in the industry took place over the course of almost a whole year, investors have notably shifted their attention to alternative opportunities like Ethereum and DeFi.

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The total AUM has almost doubled from $36 billion in January to $58 billion in December. The growth of institutional investment is also correlating with the overall growth of the cryptocurrency and blockchain industry.

As the report additionally suggests, the most "viral" part of the industry was the introduction of NFTs that have undoubtedly hit the mainstream, with various Hollywood celebrities joining the "hype train" on social media channels like Twitter.

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While the "flippening" event is still far from happening, we could clearly see the replacement of old projects and coins from the top 10. As the report suggests, 30% of assets in the top 10 of the industry are coins that were founded in the last 2.5 years.

Additionally, four projects from the top 10 of CoinMarketCap were not there back at the end of 2020.

In the end, analysts have highlighted that besides the large funds inflows to the industry in 2021, the cryptocurrency industry is still a relatively young industry that remains in the early stages of its development. This also means that there are plenty of opportunities for investors and market participants to take after performing proper due diligence.