Three of the top 10 cryptocurrencies by market capitalization, Solana (SOL 0.14%), Cardano (ADA 0.16%), and Avalanche (AVAX 0.20%), are proof-of-stake smart contract-enabled networks many investors think of as "Ethereum killers." As of 1:20 p.m. ET today, these three tokens have appreciated 4%, 6.5%, and 7.5%, respectively, on a very positive day in the crypto world.
The key driver for these three tokens appears to be capital flows into Ethereum and its competing smart contract blockchain networks. Over the past week, Solana and Avalanche led all altcoins in capital flows, suggesting investors are looking for decentralized finance (DeFi) networks to buy on the dip during this recent market turmoil.
Avalanche has outperformed all altcoins on a year-to-date basis, bringing in $25 million of capital inflows. That said, these inflows appear to be very lumpy, and suggest larger traders may be driving this token's price action.
The higher correlation we're seeing between high-growth stocks and cryptocurrencies of late suggest that capital flows matter more than ever. For investors looking to capital flow metrics outside of the Ethereum network, these three top Ethereum competitors are seeing impressive interest. Indeed, investors looking for crypto investments that can capitalize on the growth of decentralized finance appear to be homing in on the top networks in this regard.
Solana, Cardano, and Avalanche are three crypto projects I think are certainly worth looking at. Ethereum bulls may sleep well at night knowing how massive the Ethereum network is from a decentralized finance perspective. However, these three networks are catching up and seeing increased investor interest follow a surge in developer interest in these competing smart contract-enabled networks.
This one-horse race certainly has morphed into what could become an oligopolistic environment, with Solana, Cardano, and Avalanche making up a growing share of the DeFi world. For investors looking to follow the money, these three networks are intriguing options to watch right now.