A few altcoins described as “Ethereum killer” such as Cardano (ADA), Solana (SOL), Polkadot (DOT), and Terra (LUNA) have made a huge market move recently. SOL, with the recent increase in value; Cardano, on the other hand, brought significant profits with the completion of the Alonzo hard fork.
Demand for new generation altcoins is increasing
Commenting on these altcoins, Nexo co-founder and director Antoni Trenchev said that there is increasing institutional demand for the likes of Solana’s SOL token and Terra’s LUNA token. He pointed out that this is clearly evident by the fact that both assets were able to make it to the top 15 cryptocurrencies list by total market capitalization. Trenchev also said the following:
This is a cool reflection of companies that delve deeper into crypto. During the first two months of 2021, big institutions such as BlackRock, Square and MicroStrategy only stepped into Bitcoin. Now, they have tasted the benefits of BTC and are trying to tap into the untapped potential of promising blockchains and DeFi coins that can generate higher returns.
Are we in altcoin season? Trenchev explained…
Trenchev emphasized that such developments indicate that the crypto market may be in the middle of an altcoin season right now. But what is different this time around, according to the executive, is that established coins like ETH and Bitcoin (BTC) show a higher level of stability compared to some of these new assets. The stability brought by the institutions emerged on September 16 when Solana suffered a major outage. Users did not go into a panic-induced sales frenzy. Instead, SOL lost almost nothing of its value.
As we reported , according to the weekly report from digital asset manager CoinShares, in the first week of September, SOL-based investment products represented 86.6 percent of total weekly entries into the crypto investment market. SOL focused investment products saw inflows of over $49.4 million between September 6 and 10.
Corporate interest in “undiscovered” projects is increasing
Kadan Stadelmann, Chief Technology Officer of Komodo, a provider of end-to-end blockchain infrastructure solutions, said that the increasing demand for undiscovered projects is nothing new for the crypto market. However, he pointed out that what sets this time apart from previous cycles is the massive amount of capital flowing in from institutions. He stated that the risk of this is that it will result in faster market cycles for certain cryptocurrencies that do not exhibit overall market movements.
Finally, Stadelmann believes that as we move towards an increasingly decentralized future, sharp increases will be seen more widely in the prices of different altcoins. “Hundreds of DeFi projects are flying under the radar. “Many of these projects have solid technology and can gain momentum when institutions realize their potential.”