According to a survey, investors are turning to Bitcoin (BTC) and Ethereum (ETH) thus reducing the exposure of various altcoins like XRP and smart contract-enabled blockchains like Cardano (ADA) and Polkadot (DOT).
The survey suggests that contributed to this change is the subsequent price fluctuations in the first two months of the year.
“Price fluctuations in January and February this year have led investors to lean more towards larger market cap currencies such as Bitcoin and Ethereum, while moving away from small market cap options such as Polkadot, Cardano, and XRP.”
According to the survey, sentiment is improving among Ethereum rivals like Solana (SOL), Avalanche (AVAX), Cosmos (ATOM), and Terra (LUNA).
“Interests towards Solana continue to grow likewise the other ‘category, especially Avalanche, Cosmos, and Luna which are also growing.”
In addition to diversifying their portfolios, investors are increasingly investing their money in cryptocurrencies because they are seeing value in this new asset class.
“Diversification is now a major reason for investors to add positions in digital assets.”
Various speculation about investing in digital assets has been the main reason for the decline since December 2021, but growing investors see them as good value.
The survey further revealed that the biggest risk in the eyes of investors is the government’s ban on crypto assets.
The survey was conducted in March 2022. Concerns have been raised in the European Parliament about the ban on proof of work (PoW) and an executive order was expected from President Biden.
Thus political and government bans have topped the list of major dangers. When this happened, the POW ban was not enforced and the executive order was a legal order to various government departments to further study digital assets.
Trust toward bitcoin
If we analyze this market throughout then we will find that Bitcoin is only the single crypto, which is better in many aspects.
No doubt that many crypto projects including Ethereum, Solana are better but here one step by developers or incident with the founders or CEOs of the project results in a huge downfall. But here Bitcoin is free from all such things.
A recent example with Yearn.Finance developer was seen where developers decided to get out of the project and Defi industry and that resulted in a big downturn in the prices of the all related crypto assets.