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Hong Fang is the CEO of the crypto exchange Okcoin.
  • Hong Fang, a former Goldman Sachs investment banker, is the CEO of the crypto exchange Okcoin.
  • She said institutional investors were buying more altcoins than bitcoins on Okcoin for the first time.
  • Fang shares 3 popular altcoins on his platform and how big investors view meme and DeFi coins.

The total value of the cryptocurrency market topped $ 3 trillion for the first time on Monday as bitcoin near its all-time high. But it’s altcoins – which together are worth $ 1.6 trillion – that make the biggest moves.

At noon on Monday, ethereum (ETH) jumped nearly 4% in the previous 24 hours to a new all-time high of $ 4,772. Binance coin (BNB), solana (SOL) and terra (LUNA) also rose over 20% over the past week, while avalanche (AVAX) climbed over 40% in the meantime, CoinMarketCap the data shows.

According to one crypto exchange, the altcoin boom isn’t just driven by enthusiastic retail investors. They find that institutions spanning hedge funds, venture capitalists, brokers and trading desks also play a significant role in bullish sentiment.

“In traditional financial markets you pretty much see the leading edge institutions, retail clients tend to follow suit. In crypto, it always seemed to be the other way around, ”Hong Fang, CEO of crypto exchange Okcoin, told Insider in an interview.

Fang, who has already spent eight years in the investment banking division of Goldman Sachs, knows full well how cautious institutional investors can be. On the Okcoin platform, she has always seen large investors focusing on bitcoin and stablecoin related transactions – until this year.

For the first time, altcoins accounted for 53% of total institutional purchases on Okcoin between September of last year and this year, which is a 23% increase from the previous period, according to the firm. Trend is in line with Genesis Global Trading third quarter market observations report, which indicates that the demand for bitcoin continues to decline as institutions embrace decentralized finance and better altcoins, including solana, terra, avalanche and fantom (FTM).

3 altcoins institutional investors take over

Interestingly, while institutions have historically preferred altcoins that were at least four years old, they are making earlier, riskier investments in younger crypto assets on the Okcoin platform, the company observed.

“The institutions are watching the landscape very closely. Some of them approach it from a yield point of view, some of them approach it from a trading point of view, many of them probably do a combination of the two, ”Fang said. “But they are picking up the signals from the retail market.”

For example, MiamiCoin (MIA), which only launched in August, became the fourth most popular asset among institutions on Okcoin in the third quarter. The MIA token entered the market via CityCoins, an open-source, non-profit protocol that allows investors to support their city by growing their crypto treasury while earning rewards for themselves.

The MIA token jumped 31.4% over the past month, according to prices from CoinGecko. When purchased or checked out, he allocates 30% of his reward to the city.

Another altcoin sought after on the Okcoin platform is Battery (STX), a protocol that enables decentralized applications and smart contracts on the bitcoin blockchain. The protocol also powers MiamiCoin. Investors can mine STX tokens and send them to CityCoins to generate new MIA tokens. The STX token has climbed 1,259% over the past year.

High-flying layer one protocol avalanche is also in demand on the Okcoin platform, ranking the sixth most popular crypto assets on the exchange among institutions this year. The protocol, which claims to be “incredibly fast, inexpensive and environmentally friendly,” recently launched $ 200 million. “Blizzard Fund”To invest in early stage DeFi, NFT and other projects in the Avalanche ecosystem. The AVAX token has skyrocketed to 2,557.9% in the past year.

Yes DeFi, maybe even parts

Okcoin also lists popular meme coins including shiba inu coin (SHIB) and dogecoin (DOGE), but Fang said she hasn’t seen much institutional activity in these tokens except on the business side.

“Trading desks and market makers are always active in a variety of assets, be it bitcoin or altcoin, large blue chip tokens or even coins,” she said. “What matters is the profitability of trading.”

On the other hand, long-term investors tend to look to ethereum and other blue chip altcoins. But investors from all walks of life seem to demand more exposure to decentralized financial investments. In the third quarter, the number of asset managers, neo-banks and others using the company’s DeFi investment tool, Okcoin Earn, increased 62%, according to the company.

Fang said the DeFi platform, which directly connects its clients to DeFi protocols without charging transaction, gas or service fees, has met strong demand from institutional investors in part due to decent returns or annual returns. high in percentage.

One of its DeFi strategies, which requires investors to deposit MIA tokens for a fixed duration in order to earn STX tokens, has an estimated APY of 280%. Another strategy of depositing STX tokens for a fixed period of time to earn bitcoin has an estimated APY of 10%, according to the solidify.

“You can basically buy and stack MiamiCoin. In return, you get STX, ”Fang explained. “Some of the clients would buy and stack MiamiCoin, get STX, then flip the STX stack to earn BTC. They think it’s actually a great comeback.