FOMO remains alive and well in the cryptocurrency world, with lesser-known tokens outperforming in recent times. Even compared to industry leaders Bitcoin and Ether. Here’s a recent report to further supplement this paradigm shift.
Cryptocurrency exchange Okcoin published a report to highlight the rising demand for “younger” tokens amongst its customers. Okcoin witnessed a 450% increase in the number of institutional customers on its platform between September 2020 and September 2021. Also, a 124% increase in institutional trading volume within the same period. This remains the reason why the exchange saw its Daily Active Users (DAU) grow by 2,800%.
Increasing appetite for risk?
The number and trading volume of institutions surged significantly in the last year, driven largely by stablecoins and tokens in decentralized finance (DeFi). The customers showed “a greater appetite for non-Bitcoin crypto assets” compared to previous years. I.e. Altcoins made up 53% of institutions’ cryptocurrency purchases on Okcoin in September 2021. This marked a significant 23% increase from September 2020. Especially when compared to Bitcoin, the largest token’s dominance over the years.
Institutions showcased increasing interest in “younger assets” in 2021. These included MiamiCoin (MIA), Avalanche (AVAX) – both of which are relatively young. This contrasts with purchasing behavior in 2020 and earlier, when “institutions exclusively favored altcoins that were at least four years old, such as Ether and Litecoin.”
Furthermore, it noted:
“Institutional activity on the platform is indicative of macro sentiment among large-scale investors, with clientele including asset managers, venture capital and hedge funds, retail brokers, payment processors and other entities around the globe.”
In addition to this, other firms reported a similar scenario within the same time frame. Analytics firm Chainalysis observed that big-money players accounted for the majority of transactions in the decentralized finance crypto market in Q2 2021.
Meanwhile, other analysts put forward their bullish analysis as well. For instance, Crypto analyst Nicholas Merten opined that altcoin market made a surprise surge, which he believes could be a significant sign of strength.
“I still think that we’re going to see altcoins in the same exact position. Many of them like Etheruem already pressing up to those previous all-time highs following suit with Bitocin and already starting to outpace Bitcoin during its big week. This might be a little bit of a buy the rumor sell the news event where a lot of the liquidity shift doesn’t just go to Bitcoin, but especially goes to altcoins.”
Moreover, the decentralized finance sector of the crypto markets could deliver promising gains in the next few months.