Smart Tokens Attract Bitcoin Investors As Cryptoverse Continues to Grow
Investors seeking high growth are turning away from bitcoin in favour of tokens created as native tokens of blockchain platforms that host smart contracts and apps, according to CoinShare data. In turn, smart contract tokens on decentralised finance app-supporting platforms are expected to provide capital appreciation and similar returns to growth stocks, said Bundeep Rangar, CEO of crypto-focused asset manager Fineqia. Investment products tracking ether and solana have seen small inflows even as bitcoin fell out of favour, the data showed. Around seven of the top 20 biggest crypto assets are smart contract tokens, including ether, dot, solana and cardano, according to Bank of America (BofA) analysts. They write that smart contract tokens and the blockchain-based applications they power resemble growth stocks in the equities world. BofA analysts said they expected 2023 to be the year of token price divergence. However, the global macro outlook and central bank policy could hit the growth of crypto projects and their associated tokens. Meanwhile, James Butterfill, head of research at CoinShares, cautioned it was too early to call a major divergence in crypto. Although, some crypto watchers say the relative strength in smart-contract tokens this year points to a solid performance by the most established DeFi protocols despite the market ructions of 2022.
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