Investors cautiously re-enter crypto funds while ETH vehicles show strength

Investors like the looks of proof-of-stake coins, while Ethereum leads the way.

A new report from analytics firm Coinshares shows that while the market dip may not have ended, prices are now at levels where stock market investors are once again showing signs of interest in digital asset funds.

A report published yesterday from Coinshares shows that multiple funds have begun seeing net inflows after weeks of record outflows in the wake of a crippling, market-wide crypto dip. In totally, legacy markets poured in $74 million into crypto investment vehicles, though not all products showed signs of strength.

Cryptocurrencies show inflows after record outflows in previous two weeks.

Ethereum investment product market share at record high 27%.https://t.co/xhzVCkBjM9 pic.twitter.com/Dw2WrdA2Rs
— unfolded. (@cryptounfolded) June 2, 2021

While some analysts are calling for Bitcoin as low as $16,000 per BTC, Bitcoin products were among the weakest performers, with $4 million in net outflows. The report notes that altcoins — particularly more environmentally friendly proof-of-stake altcoins — were strong performers, with Cardano, Ripple, and Polkadot funds each seeing above $3 million in inflows.

The true star of the report is Ethereum, however. ETH vehicles saw a total of $47 million in inflows, making up the majority of net digital asset fund investments and bringing ETH vehicle market dominance up to 27%.

The bullish outlook from investors on the asset comes after a string of bullish reports from academic and institutional finance research desks. Last week both the University of Pennsylvania and Goldman Sachs wrote research arguing for Ethereum as a store of value, in part due to its importance to the DeFi ecosystem.

The world’s largest layer one smart contract platform also has a number of technical advancements and headwinds on the horizon. Layer two scaling solution Arbitrum recently went live with a guarded launch, and the long-awaited gas fee overhaul of EIP-1559 is set for later this year, as well as a likewise much-anticipated transition to a proof-of-stake consensus model.

Stateless Money, a staking service that manages $150 million worth of assets, announced it would launch an index token for Polkadot.

Index Investing Comes to Polkadot

Polkadot is a fast-growing interoperable blockchain backed by the Web3 Foundation that has seen significant interest from developers and investors. There are hundreds of projects under development by teams worldwide on Polkadot and its canary network Kusama.

Instead of sifting through these projects, the Polkadot Index Network Token (PINT) will help investors make a general bet on the broader ecosystem. Called the Polkadot Index Network Token (PINT), the token will give holders exposure to the top projects in the Polkadot ecosystem.

Stateless Money said it would build PINT in collaboration with ChainSafe, its development partner for the project. The index token is being financed by StakerDao, a cross-chain decentralized autonomous organization.

PINT’s overall development will be overseen by a governing council that consists of Polychain Capital, Hypersphere Ventures, HashKey Capital, Acala, and Stateless Money.

We're excited to share that the @stakerdao community has approved our proposal to build the @polkadotindex (🍺PINT) with @ChainSafeth

Learn more 👇https://t.co/KKS8DpZE1K

— Stateless_Money (@MoneyStateless) April 8, 2021

According to the official proposal, PINT can also be used by Polkadot parachains looking to reduce their risks of holding a single native asset within their treasuries.

At the time of the proposal, Acala, Equilibrium, HydraDX, Litentry, Moonbeam, and Plasm have expressed interest in joining the index.

Anyone will be able to deposit their Polkadot-based tokens to mint PINT tokens in equal value. Because it’s an index, the tokens’ circulating supply will be based on the issuance, redemption, and burning of PINT.

On-chain governance of the index token will be achieved through PINT holders who will approve assets to include in the index.

Disclosure: The author does not hold the cryptocurrency mentioned in this article at the time of publication.

Index Funds