Institutional investors have turned to altcoins amid a wider cryptocurrency market downturn brought on by the collapse of the Terra ecosystem, with data showing investors are betting on Cardano ($ADA) and Polkadot ($DOT) specifically.

According to CoinShares’ latest Digital Asset Fund Flows Weekly report, the ongoing volatility in the cryptocurrency space has led to “fickle investors with some seeing this as an opportunity while the aggregate sentiment is predominantly bearish.” The report notes that outflows in the past week totaled $154 million in the Americas, while Europe saw $12.4 million of inflows.

The report details that cryptocurrency investment products now have a total of $38 billion worth of assets under management, their lowest since July 2021. While the flagship cryptocurrency Bitcoin saw outflows totaling $154 million throughout the past week, its year-to-date and month-to-date flows remain positive, data shows.

While Bitcoin and short Bitcoin flows were negative in the last week, institutional investors have been diversifying their holdings through multi-asset investment products, which saw inflows of $9.7 million.

According to CoinShares, institutional investors may be seeing these multi-asset investment products as ”safer relative to single line investment products during volatile periods.”

Out of the multiple cryptoasset investment options available, institutional investors allocated $1 million into Cardano investment products, with a similar amount going to Polkadot investment products. XRP, Solana ($SOL) and Litecoin ($LTC) products saw inflows of $700,000, $500,00, and $100,000 respectively.

The firm added that blockchain equity investment products saw outflows totaling $20 million over the past week.

As reported Peter Smith, CEO of leading cryptocurrency exchange and wallet provider Blockchain.com, has warned more cryptocurrency destruction is coming in the short-term but believes that in the long run, this type of destruction will lead to a stronger industry.

To Smith, more pain is coming to the cryptocurrency space, but crypto investors should take it as a lesson that it’s important to dollar-cost average into their positions to avoid heightened exposure to sudden bouts of volatility.

Recently, the co-founder of cryptocurrency trading and venture capital firm Three Arrows Capital, Su Zhu, has revealed he sees some signs that Bitcoin ($BTC) is reentering an accumulation range after the cryptocurrency’s price fell for seven weeks in a row for the first time in its history.

The co-founder of the cryptocurrency hedge fund also added that Bitcoin has been showing strength when compared to equities, at a time in which analysts from Bank of America noted the flagship cryptocurrency has been failing as an inflation hedge over its correlation with equities.

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The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

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