MEXCThese Top Altcoins Are Expected To Surge On Institutional Demand
A recent crypto rally has largely favored altcoins, with most top tokens outpacing their bigger peers Bitcoin (BTC) and Ethereum (ETH). Institutional buying, which is a key factor behind the rally, could be set to balloon in the coming weeks.
Top altcoins rose on Friday after exchange operator CME Group said it was launching indexes and price indicators for 11 tokens in the space.
Most of the 11 tokens mentioned by CME also registered strong gains over the past 24 hours.
The planned indexes are likely to drive the creation more financials instruments centered around altcoins, which is expected to boost capital inflows to the tokens.
CME to herald more interest in altcoins
Most of the 11 tokens, which include majors such as Solana (SOL), Cardano (ADA), Polygon (MATIC) and Uniswap (UNI), rose between 0.1% to 3% on Friday.
SOL was the best performer among the 11 altcoins supported by CME, adding about 2.8%. The gains helped the token reclaim its spot as the sixth-largest cryptocurrency, after it was briefly dethroned by Terra (LUNA).
Bitcoin Cash (BCH), the smallest member of the lot, lagged its peers, trading negative for the day.
CME- the world’s largest commodities trader- is by far the biggest entrant into altcoin indexes. The space has otherwise been dominated by relatively smaller crypto exchanges or asset managers.
As such, the move is expected to drive a host of new derivatives based around altcoins. CME’s Bitcoin futures index is the basis for all the Bitcoin ETFs available in the United States.
Institutional demand steadily rising
Trading by investment houses has become a major factor in how a token’s price performs. The trend can be observed since late-2020, where an influx of capital saw Bitcoin’s price jump more than 1000% in a year.
But with with investment in the world’s largest token slowly becoming more saturated, altcoins are offering better returns. This has prompted a steady influx in institutional trade this year.
A recent report from asset manager CoinShares showed that crypto assets have seen capital inflows for eight out of 13 weeks this year.
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