The market is in deep red. Apart from some random Meme cryptos, we are hardly seeing any green candles.
But someone is buying quietly and slowly. I’m referring to institutions. And as we know, institutional interest in cryptos is growing. Especially, approval of the Bitcoin- and Ethereum spot ETFs played a big role in this. Institutions like to play it safe, so don’t expect any mid or low-cap coins in this list. It’s rather the opposite, expect some of the biggest cryptos to be part of this list. But which ones?
1) Bitcoin ($BTC)
Bitcoin is without a doubt the leader of the pack. Besides the first mover advantage, it also has strong fundamentals. When Bitcoin peeps, the market listens. Quite a few remarkable events already happened in favor of Bitcoin this year. Here they are:
- January saw the approval of Bitcoin spot ETFs. Once they started trading, $BTC reached a new ATH within two months. Currently, that ATH stands at $73,737. Its current price of $67,478 is only 8.5% away from that of ATH.
- The Bitcoin halving occurred in April. This event only happens every four years. 6 So far, it was always followed by a bull run. The halving reduces the miner’s rewards for mining blocks by 50%. It also reduces $BTC’s inflation rate.
Source: X
So, we see an increase in institutions showing interest in Bitcoin. Many see Bitcoin as a hedge against inflation. Its finite supply of 21 million also helps. Soon you can expect a supply shock on exchanges. I will get back to that shortly. This should drive the $BTC price up even further.
More About Bitcoin
And it’s not just big banks, companies are putting Bitcoin on their balance sheets as a Treasury asset. Microstrategy (Michael Saylor’s company) is not the only one. There are a handful of public companies including Square and Tesla holding Bitcoin as a treasury asset. And none of them are looking for ETH, SOL, or any other crypto for their balance sheet. Only Bitcoin.
Source: X
The combination of institutional interest, together with Bitcoin’s fundamentals, is amazing. It puts Bitcoin in the driver’s seat for future growth. And before it moves a leg up we are also DCAing into it using the ByDFI exchange. It is the best place to do so, especially for our American audience.
2) Ethereum ($ETH)
Ethereum is next in line, for many reasons. For example, it also lists 2nd in market cap. Like Bitcoin, it also had a spot ETF approved. This happened on 23rd May. The SEC approved the 19b-4 forms. This is the first step of a 2-step process.
Source: X
This approval saw an immediate price increase of 20%. However, ever since, $ETH has been going sideways. Nonetheless, once these $ETH spot ETFs start trading, it will drive demand. I do expect another price jump once the Ethereum spot ETFs start trading. Before this happens, the SEC needs to approve the S-1 forms. That’s the second step. This can be another month or two.
More About Ethereum
Having said that, Ethereum also has strong fundamentals. Ethereum was the first blockchain to offer smart contracts. This put it at the forefront of DeFi. In turn, DeFi is transforming finance. Ethereum is leading the way with this. Currently, Ethereum holds 60% of all TVL.
Source: X
Institutional interest will keep rising for Ethereum. The SEC has approved 8 Ethereum spot ETFs. This included, for example, BlackRock, Fidelity, VanEck, and Grayscale. Once trading starts, institutional money will start flowing into these Ethereum spot ETFs.
3) Bitcoin Spot ETFs
Bitcoin spot ETFs are another area in which institutions are investing. After the SEC in the US approved Bitcoin spot ETFs, various countries offered $BTC spot ETFs. For example: Canada, Germany, Switzerland, and Brazil, among others. This shows that Bitcoin spot ETFs are gaining worldwide popularity. There’s a very attractive reason why institutions like spot ETFs.
Source: X
They don’t need to deal with holding and storing actual $BTC. However, they buy a spot ETF and have exposure to $BTC. The firm offering the $BTC spot ETF is the one holding the actual $BTC.
Spot ETFs are listed on stock exchanges, so not on crypto exchanges. Another reason why institutions like these products. Institutions are a lot more familiar with stock exchanges. Here are more reasons why they like Bitcoin spot ETFs:
- Security and compliance.
- As a hedge against traditional market fluctuations.
- Diversification.
In mid-May, over 600 firms invested in $BTC spot ETFs in the US to date. That was worth over $3.5 billion. During the trading week between 3-6 June, the 11 US $BTC funds bought 25,729 $BTC. Miners only mined 3,150 $BTC that week. That’s an 8x difference.
4) API3 (API3)
API3 is an oracle. That’s a heated crypto sector with plenty of competition. Chainlink or Pyth, to just name a few. And why is this such a heated sector? Well, I mentioned this a few times already. Blockchains can’t communicate with the outside world.
However, they still need real-world information to deliver their services. That’s where oracles come into the picture. As you can see, that’s a pretty important role, that oracles play. Now you can also see why this is such a heated crypto sector.
Source: X
Now, we have seen Chainlink being heavily accumulated. That’s because it’s a leading infrastructure project. But if there is a project that flew under the oracles’ radar in this sector, it’s API3. It’s currently already active on almost 50 chains. So, we may see an accumulation for this project.
More About API3
With API3, devs can add a dAPI directly to a smart contract. An API is an Application Programming Interface. It allows software applications to talk to each other. A dAPI is the same, but it’s decentralized. API3 uses them for data feeds.
Source: X
API3 is also about to introduce the OEV network. This is Oracle extractable value. This can extract value that otherwise would have gone to other parties. For instance, through arbitrage or liquidations. This can incentivize protocols. If you want to bag some of the high-potential API3 tokens, try out ByDFI as I mentioned earlier, you get a 1-month fee for AB alpha access if you trade using the AB trading code.
Where Are the Altcoins?
So, despite $BTC closing in on a new ATH, cryptos are out of the picture. Solana has been doing good, but institutions are not lining up for $SOL yet. How come? Well, one reason is that institutions are waiting for Ethereum spot ETFs to start trading. As I explained earlier, this can take another couple of weeks to months.
Source: X
A spot ETF is more secure and compliant. That’s much more attractive to institutions. Institutions aren’t that adventurous. In contrast, they’re rather conservative, in general. The Ethereum ecosystem still has the first-mover advantage. Whether you like it or not. That also means that most VCs lock their money up in this ecosystem. This makes other cryptos less attractive to institutions.
Once the Bitcoin spot ETF started trading, the prices of most cryptos started to drop. Institutional money is locked up in Bitcoin and doesn’t flow over to altcoins. Now, the listing of the Ethereum spot ETF could see a come back from many cryptos. However, institutions would still rather watch this from the sidelines. Their money will go to the $ETH spot ETFs.
So, there you have it. Are you on a similar trajectory as the institutions? Or do you have a different strategy? Let me know in the comments.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
