Institutional investors buy XRP and ADA instead of ETH

CoinShares’ Digital Asset Monthly Fund Manager Survey revealed that investors are investing in digital assets in Cardano, XRP, and Polkadot instead of Ethereum.

Investors cited speculative reasons, good value and Distributed Ledger Technology growth as the main reasons for adding digital assets to their portfolios.

From speculation and investor sentiment to recent developer activity on their respective blockchains, there are a number of factors that can be attributed to the increased investor interest in Cardano and XRP compared to Ethereum.

The upside potential of the all-time high price for Cardano and XRP compared to Ethereum could be an incentive for speculators to channel their asset allocations into these digital assets, albeit in the long run. According to analysis by Crypto Hot News, Ethereum had a first mover advantage over other blockchains as it pioneered smart contracts. As a result, the Ethereum platform has grown rapidly over the years with an increasing number of transactions. However, the platform’s scalability challenge has resulted in higher gas fees, especially during peak network periods. The lack of interoperability between blockchain platforms was another shortcoming for the Ethereum network.

In September 2021, Alonzo Upgrade on Cardano Network provided fully functional smart contract capability, allowing NFTs (Non-Fungible Tokens) to be minted and running several Decentralized Applications (DApps). With higher speeds and lower transaction costs, these developments have made the Cardano ecosystem a direct competitor for the Ethereum Network. High transaction expenses and scalability challenges are likely to have contributed to investor funds flowing into Cardano at the expense of Ethereum.

Ripple has been involved in an ongoing legal battle with the US Securities and Exchange Commission (SEC) since late 2020, with the SEC alleging that Ripple has offered illegal security through the sale of its XRP token. The initial court rulings seem to be on track for Ripple to win the case against the SEC. Speculators predict that a Ripple win against the SEC will lead to a surge in the XRP price. Thus, it increases the investor’s confidence in XRP.

Should we expect to see more outflows of funds from Ethereum to Cardano and XRP? The race to be the blockchain of choice is only heating up. Developer activity is expected to concentrate only on blockchains to make them more efficient and secure.


Source: Kripto Coin Haber