 ▲ Cryptocurrency whale |
As the virtual asset market moves beyond its early speculative phase and integrates into the institutional financial system, the range of investable assets chosen by institutional investors is rapidly narrowing to Bitcoin (BTC) and a handful of large-cap assets.
According to cryptocurrency-focused media outlet Cointelegraph on February 23, digital asset investment firm NYDIG said in a recent report that the investment universe is increasingly shrinking, with institutional interest concentrating on only a very small number of assets such as Bitcoin and Ethereum (ETH). Greg Cipolaro, NYDIG’s Global Head of Research, noted, “The strategy of broadly diversifying across numerous altcoins is disappearing,” adding, “As the market matures, the shift toward assets with established institutional channels, such as spot Bitcoin ETFs, will accelerate.”
Cipolaro pointed out that the digital asset market has now moved beyond being a simple technological experiment and has entered a stage where it must prove its tangible investment value. Institutional investors prioritize assets with ample liquidity and regulatory clarity, while the majority of altcoins that fail to meet clear standards are increasingly being excluded from consideration. NYDIG analyzed that as Bitcoin solidifies its position as digital gold, only Ethereum is currently classified as a surviving asset capable of earning a place in institutional portfolios.
This phenomenon is further deepening polarization in the digital asset market. Massive capital inflows through spot Bitcoin ETFs have strengthened Bitcoin’s market dominance while suppressing the spread of funds into mid- and small-cap altcoins. NYDIG projected that as institutional investors focus solely on proven assets for risk management purposes, a broad-based altcoin rally like those seen in the past will be difficult to replicate. As market transparency increases, structurally weak assets that fail to function as stores of value face inevitable elimination.
Investors must now fundamentally shift their perspective on the digital asset market. The era when thousands of assets rose simultaneously has passed, and the time has come to closely analyze each asset’s institutional acceptance and practical economic utility. NYDIG emphasized that Bitcoin’s role as the benchmark of value for the entire market will continue to grow, and investors should consider asset scarcity and changes in the regulatory environment as key variables in investment decisions.
The digital asset market is undergoing qualitative change as it integrates with institutional financial infrastructure. The shrinking investment universe—where only a select few assets chosen by institutional investors survive—is an inevitable outcome of a maturing market. The widening gap in fundamentals between assets, leading to price differentiation, is expected to become a defining trend in the market going forward.
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