DeutschAltcoins are becoming increasingly popular for creating corporate crypto reserves. On the one hand, an end to Bitcoin’s singularity indicates the concept’s maturation. On the other hand, more and more treasury firms offer an accessible entry point to invest in various cryptocurrencies.
Bitvavo, one of the leading exchanges from Europe (Netherlands) with a large selection of cryptocurrencies. PayPal deposit possible. For a limited time only: 10 Euro bonus when you sign up via CoinPro.ch
Why Altcoins are Becoming more Popular as Part of Crypto Reserves
Altcoins are becoming increasingly popular as part of crypto reserves – this observation was made by Reuters after evaluating investments from over 200 companies. Bitcoin, the market’s largest cryptocurrency, is increasingly fading into the background, but still dominates both state and corporate crypto investments.
“According to an analysis by law firm DLA Piper, there were at least 200 companies in the Digital Asset Treasury (DAT) sector in September, primarily focused on Bitcoin and boasting a total capitalization of around $150 billion, which represents a threefold increase compared to the previous year,” Reuters wrote.
Corporate crypto investments, in particular, are already very popular. Hardly a week goes by without another company publicly announcing its entry into the world of Bitcoin and co.
However, the market leader’s price development cannot always meet investors’ demands. Therefore, some institutional investors are turning their backs on Bitcoin and prefer to invest in other cryptocurrencies instead.
“In recent weeks, for example, Greenlane (GNLN.O), OceanPal (OP.O), and Tharimmune (THAR.O) have announced plans to invest in BERA, NEAR, and Canton Coin,” Reuters argues.
Reuters considers this development harmful and fears additional risks for investors. The report also relies on an assessment by Cristiano Ventricelli, a digital asset expert at credit rating agency Moody’s Ratings.
“There’s an expansion towards less liquid cryptocurrencies, and this is where the risks can particularly increase,” Ventricelli says. “If the markets fall, these companies face significantly more pressure.”
Reuters evaluated 40 companies that invested in crypto from April to November. Only five of these companies, therefore, focus on Bitcoin. However, the gazette also mentions that experienced crypto investors are often behind these firms – such as Winklevoss Capital, Galaxy Digital, Jump Crypto, Pantera Capital, Kraken, or DWF Labs.
However, many of these companies don’t just create crypto reserves. They deliberately establish themselves as crypto proxy investments. This means that their core business lies in crypto investment. Publicly traded companies thus offer investors the option to buy into regulated firms to indirectly participate in the growth of the crypto market.
While Reuters takes a critical stance on institutional Altcoin investments in its report, this, however, testifies to the concept’s increasing maturation. That Bitcoin leads as the market leader is the usual procedure. Subsequently, other cryptocurrencies follow the same trend.
While BTC is the most popular asset in its class, various cryptos also cover different areas of application. Investors are therefore not only concerned with higher volatility compared to Bitcoin, but also with covering additional use cases.
Bitcoin miner Bitmine, for example, is known for establishing the largest Ethereum reserve on Earth. ETH dominates Web3 and could immensely benefit from a boost in the DeFi sector’s importance. According to CoinGecko records, Bitmine is only one of 18 companies internationally that buy Ethereum. 15 other companies prefer to invest in ETH competitor Solana.
