Institutional investment flows out of ETH and into competing L1 altcoins

Institutional investors have recently shifted their focus away from ethereum and towards competing layer-1 blockchains, with altcoin investment products seeing increased inflows last week, while ethereum products saw outflows for the third week in a row.

Data from CoinShares’ latest Digital Asset Fund Flow report shows that investors bought $3.5 million worth of Avalanche (AVAX), Solana (SOL), Terra (LUNA) and Algorand (ALGO) last week (through April 22). ) fund, while outflows from Ethereum products totaled $16.9 million.

This marked the third consecutive week of outflows from ethereum products, during which total outflows reached $59.3 million, which is equivalent to about 35% of its total year-to-date outflows of $169 million.

Notably, despite some recent indecision, investors also favored digital gold last week, with bitcoin products seeing $2.6 million worth of inflows.

Over the past 10 weeks, inflows into Ethereum products have only reached $68.5 million, which could signal a bearish institutional trend for the major blockchain.

Fund Flows Show $16.9M Out of Ethereum Last Week: CoinShares

Alternative layer-first blockchains have grown in popularity recently, with the use of decentralized applications (dApps) on Solana increasing over the past seven days, according to DappRadar’s metrics. Decentralized trading platform Orca saw a nearly 43% increase in usage in a week, and automated market maker Raydium saw a 15.5% increase in usage, with more than $1.5 billion in trading volume across its apps.

While Avalanche’s dApp usage metrics haven’t risen over the past week, the blockchain’s investments in incentive programs and the millions of dollars it’s spending to attract developers to its platform have traders bullish on AVAX’s future.

Avalanche, Solana, Terra, and Algorand saw inflows of $1.8 million, $800,000, $700,000, and $200,000, respectively, while Bitcoin's inflows hit $2.6 million for the first time in two weeks, analysts noted. Month-to-date outflows from the largest cryptocurrency remain at $178 million.

Outflows over the past three weeks totaled $219 million, a figure that fell to $7.2 million last week, in stark contrast to $134 million outflows in the first week of April.

Despite the recent outflows, analysts noted that inflows into crypto assets have remained positive so far this year, with $389 million inflows since the start of the year.

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