Finance

Cardano racks up record inflows as altcoins scale up during bitcoin’s downfall

Smaller cryptocurrencies are rising in prominence again as bitcoin posted its eighth consecutive week of outflows and newcomer cardano held the spotlight.

Altcoins including ether, solana, cardano and polkadot now represent 32% of total digital assets under management by investors, according to data from CoinShares, close to the record 35% set in mid-May and surpassing the 30% high seen back in January 2018.

Cardano, which trades under the ticker ADA, has been steadily gaining popularity with retail traders as the token’s network undergoes an upgrade which could see it challenge Ethereum for dominance in smart contracts and decentralised finance.

READ Meet cardano, the cryptocurrency coming for bitcoin’s crown

Cardano inflows totalled $10.1m in the week to 30 August, CoinShares said, setting a new record for the cryptocurrency. Despite being the world’s third largest crypto by market capitalisation behind ether and bitcoin, the token’s overall market share still came in at just 0.15% — cardano’s market capitalisation stood at $90.7bn at 12:30pm BST on 31 August, far behind ether’s $395.5bn and bitcoin’s $895.9bn.

Meanwhile, bitcoin continued its slide with outflows of $3.8m. The cryptocurrency has reported outflows in 14 out of the last 16 weeks, totalling $650m.

Overall, digital asset investment products experienced their second week of consecutive inflows, posting $24m, following the lengthy period of soured investor appetite for cryptocurrencies.

“This follows the longest bearish streak since 2018, however the recovery has been predominantly due to improved sentiment in altcoins rather than bitcoin this time,” said CoinShares analyst James Butterfill.

READ City firms say crypto will oust traditional currency in 10 years

“Cardano is now just behind the major headline grabbers bitcoin and ethereum,” said deVere Group chief executive Nigel Green, who said experts had been watching the token’s progress for more than 18 months.

“Cardano is on a clear upward trajectory and there’s no reason to think that this will come to a halt any time soon.”

Individually, prices were rising across the board for cryptocurrencies on 31 August. Among the biggest risers were polkadot, up more than 16% in 24 hours to almost $29, and ether, up 7.8% to $3,421.

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To contact the author of this story with feedback or news, email Emily Nicolle

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