A recent crypto rally has largely benefited altcoins, with most altcoins outpacing Bitcoin (BTC) and Ethereum (ETH). Institutional buying, which was the key factor behind the rally, according to some crypto market experts, could turn into a bubble in the coming weeks.
CME to focus more on altcoin projects
Leading altcoins rose on Friday after exchange operator CME Group said it has launched indices and price indicators for 11 tokens in the crypto market. However, some market experts say that the planned indices are likely to enable the creation of more financial instruments focused on altcoin projects. It is also expected to increase capital inflows into the tokens. Most of 11 tokens including leading altcoins
Solana (SOL), Cardano (ADA), Polygon (MATIC) and Uniswap (UNI) 0% on the day It rose between 0.1 and 3 percent. Among the 11 altcoins supported by the CME, SOL was the best performer, up about 2.8 percent. The gains helped the token reclaim its place as the sixth largest cryptocurrency after being briefly dethroned by Terra (LUNA).
Institutional demand is constantly growing
Bitcoin Cash (BCH), on the other hand, lagged behind peers and traded negatively on the day. CME is described as the company that makes the largest entry in altcoin indices by far. The crypto market would otherwise be dominated by relatively smaller crypto exchanges or asset managers. Therefore, the move is expected to drive a number of new derivatives based on altcoins. CME’s Bitcoin futures index is known as the first BTC ETF available in the US.
Trading by investment institutions has become an important factor in how a token’s price performs. The trend can be observed since late 2020, when an influx of capital saw the price of Bitcoin increase by more than 1000 percent in one year. But as investment in Bitcoin gradually becomes more saturated, altcoin projects are offering better returns. As cryptokoin.com reported earlier, a recent report from asset manager CoinShares showed that crypto assets saw capital inflows in eight of the 13 weeks this year.
28175
