Fluctuations in the international situation… Are coin investors moving to cryptocurrency-related stocks?

In this altcoin winter, companies like Coinbase, Circle, and Robinhood are outperforming all major tokens. Even Bitcoin is not performing as well as companies that regularly purchase it.

Supply and demand, the improved macroeconomic atmosphere after today's US-China trade negotiations, and institutional preference for Bitcoin are driving this trend.

Companies Leading the Altcoin Market

Many cryptocurrency investors are waiting for the altcoin season, but it is not happening. Currently, there are various competitive explanations, but none are completely convincing.

Meanwhile, cryptocurrency companies like Coinbase are reaching all-time highs. Some analysts are wondering if this market is completely replacing altcoins:

This concept may be discouraging, but there is compelling evidence supporting it in many industry sectors. There are few cryptocurrency stocks to invest in, compared to numerous altcoins.

Additionally, institutional investors have much more capital and liquidity than retailers. These supply and demand issues concentrate capital into a few stocks.

However, that is only part of the equation. Essentially, corporate funds are flowing into cryptocurrency, and prefer Bitcoin much more than altcoins.

For example, a study in April claimed that 90% of institutional cryptocurrency fund investments are in Bitcoin ETFs, almost completely ignoring altcoin products.

Simultaneously, macroeconomic factors favorable to the stock market are improving. For instance, the Iran-Israel war ended in a ceasefire in less than two weeks.

And today, Trump announced a trade agreement with China, potentially ending a very feared trade war. As a result, Wall Street is showing an upward trend, and US cryptocurrency stocks are part of this.

In other words, a few "cryptocurrency stocks" are essentially dependent on Bitcoin. Retail investors can now diversify their portfolios with corporate Bitcoin holders and completely abandon the altcoin market. This was impossible just a year ago.

Nevertheless, explaining this issue as corporate antipathy towards altcoins is an oversimplification. After all, Bitcoin itself has been highly volatile recently.

Coinbase, as a major cryptocurrency exchange, is significantly outperforming Bitcoin while holding massive amounts of tokens. Yesterday, CEO Brian Armstrong announced that Coinbase is purchasing Bitcoin every week!

All of this is very concerning for several reasons. Clearly, this trend is completely contrary to the concept of DeFi.

If corporate investors lead the major market movements in the cryptocurrency industry, who will use altcoins? How can a decentralized economy function with so much centralization?

Moreover, it does not seem sustainable. Coinbase is enthusiastically investing in Bitcoin while simultaneously outperforming it. If cryptocurrency companies continue to outperform the actual industry, empty speculation will become the primary engine of future growth.