Robinhood: “Investors diversifying beyond Bitcoin and Ether into altcoins in a down market”

With the cryptoasset (cryptocurrency) market extending its bearish run, an analysis suggests investors are diversifying beyond top assets such as Bitcoin (BTC) and Ethereum (ETH) into a broader range of tokens.

According to Cointelegraph on the 22nd (local time), Johann Kerbrat, head of Robinhood Crypto, said in a recent interview, “Customers see the current market as a ‘buy-the-dip opportunity,’” adding that “they are not staying only with the top two to three assets but are expanding trading into a wider variety of tokens.” He explained this indicates investors are beginning to accept crypto volatility as an inherent characteristic of the asset class.

Still, views within the market remain mixed. In November last year, Anthony Basilie, president of Coinbase Asset Management, noted that “the market has yet to reach a clear consensus on what should be considered the next core asset after Bitcoin and Ethereum.” At the time, he added that Solana (SOL) could be discussed as a candidate. Among institutional investors, there is said to be a strong consensus that Bitcoin remains the top choice and Ethereum the second.

Institutional fund flows also appear to be in a cautious expansion phase. Basil Al Askari, chief executive officer (CEO) of institutional trading platform MidChains, said, “Large asset managers are engaging in sizable block trades focused mainly on the top 20 assets,” adding that “it has not yet expanded in earnest into mid- and small-cap altcoins or DeFi yield products.”

Meanwhile, on Robinhood, real-world use cases are also increasing beyond simple holding. Kerbrat said, “Usage has risen rapidly since the introduction of the staking feature in December,” adding that “participation in DeFi is expanding despite market uncertainty.”

However, overall investor sentiment across the market remains subdued. The Fear & Greed Index has stayed in the ‘extreme fear’ zone since early February, while U.S. spot Bitcoin ETFs have posted net outflows for five consecutive weeks, with about $3.8 billion having exited.