A new report revealed contrasting investment trends in the cryptocurrency market last week. While major assets like itcoin">Bitcoin (BTC) and Ethereum (ETH) experienced significant outflows totaling $226.2 million, several alternative cryptocurrencies (altcoins) bucked the trend with sizable inflows.
According to data from CoinShares, Litecoin (LTC) garnered $3.2 million in inflows, and Chainlink (LINK) saw $1.7 million pouring in over the same period. Analysts cited the recent itcoin">Bitcoin halving event and expectations of prolonged high-interest rates as potential factors driving investors away from the larger crypto assets.
The halving reduced mining rewards, fuel concerns about miners’ profitability and potential sell-offs. Meanwhile, with interest rates expected to remain elevated, investors appeared less inclined to hold riskier assets like itcoin">Bitcoin and Ethereum.
In contrast, the inflows into altcoins like Litecoin and Chainlink were likely driven by their relatively strong price performances over the past week. Litecoin gained nearly 4%, while Chainlink saw a 6% price increase.
However, both coins experienced declining trading volumes compared to the previous week, which could impact future price movements if the trend continues.
The report also speculated that some itcoin">Bitcoin miners might transition to mining artificial intelligence (AI) workloads due to reduced profitability post-halving, with firms like BitDigital, Hive, and Hut 8 already generating revenue from AI operations.
As market dynamics evolve, investor sentiment continues to shape the flow of capital across various cryptocurrencies, creating opportunities and challenges for different digital assets.
