Institutional investors have warmed to the idea of crypto investing in recent years. In 2021 we saw a significant inflow of institutional capital into cryptocurrencies, and this trend is expected to continue over the long term. After all, cryptocurrencies have become a serious asset class for many investors. Here’s why this development matters for retail or individual investors:
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Institutional investments in crypto tend to be long-term, which can support stronger asset value over time.
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The influx of institutional money adds credibility to crypto, attracting more individual investors.
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Institutional capital does not flow into every token; rather, it is concentrated on a selected list of cryptocurrencies that meet certain criteria.
At first glance you might expect Bitcoin (BTC) to be the obvious recipient of institutional funds. However, that is not always the case. While Bitcoin remains a major part of the crypto landscape, many institutional investors are focused on these two coins:
Ethereum (ETH)
Ethereum (ETH) is the second-largest cryptocurrency by market capitalization. The primary reason it attracts many investors, including institutions, is its broad and active ecosystem. Ethereum provides a platform where developers can build and deploy decentralized applications.
Data source: Tradingview.com
Indeed, thousands of projects have launched on Ethereum, and the chain supports a large share of new decentralized apps in the market. That makes it a central driver of blockchain innovation and an important foundation for future development.
Cardano (ADA)
Cardano (ADA) is another scalable blockchain that uses proof-of-stake to validate transactions. Like Ethereum, Cardano offers an efficient platform where developers can create and launch decentralized applications.
Founded in 2017, Cardano has grown into one of the world’s more valuable blockchain networks and has attracted institutional interest. At the time of writing, ADA is trading around $1.34 with a market capitalization of approximately $44.7 billion.