Institutional investors continue to enter the cryptocurrency market, according to a new report from analyst firm CoinMetrics. The first three months of 2021 were also marked by a staggering rise of DeFi tokens.
Institutional investors continued to invest in cryptocurrencies in the first quarter of 2021, but the rate of their investment decreased compared to the fourth quarter of 2020. This is stated in the latest report by CoinMetrics. The new wave of institutional interest helped the price of bitcoin surpass $50,000 in February, and then boost $60,000 in March. Analysts cite the most significant reports of institutional entry into the crypto market: the $ 1.5 billion purchase of bitcoins by Tesla, and the increase in crypto investments from Square and MicroStrategy.
Major investment banks also announced plans to enter the crypto market. BNY Mellon announced the launch of services for the purchase of BTC and other crypto assets. Morgan Stanley announced plans to launch three funds that will allow its clients to indirectly own bitcoins. Investment company Fidelity filed a new application to launch an exchange-traded bitcoin fund (ETF). ETH-linked futures were launched on the Chicago Mercantile Exchange (CME) in February 2021.
The CoinMetrics report also notes a downward trend in Bitcoin's correlation with both gold and the S&P500 benchmark.
The first quarter of 2021 was marked by a return of investor interest in decentralized finance. The majority of the most popular DeFi tokens are up at least 100% in the first three months of the new year. The leader among them was the token of Uniswap (UNI). From January 1 to the end of March 2021, it increased in price by 486%. This growth was fueled by the announced Uniswap update scheduled for May 5th. Tokens from other DeFi-focused marketplaces (SUSHI, CRV, BAL, 1INCH and ZRX) also posted staggering gains, increasing at least 250% YTD.