Investors looking for high growth are turning away from bitcoin and towards newer cryptocurrencies created as native tokens of blockchain platforms that host smart contracts and apps. These tokens are tracked by MarketVector’s Smart Contract Leaders Index, which is up 36% in 2023, outpacing even bitcoin’s 33% rise. Solana’s token has seen a 76% increase this year. Experts expect smart contract tokens on platforms that support decentralized finance (DeFi) apps to provide the biggest crypto returns, similar to growth stocks. In fact, some investors are shifting towards smart contract tokens, such as ether and solana, and investment products tracking these tokens have seen small inflows even as bitcoin products experienced outflows.
The Bank of America analysts believe that smart contract tokens and the blockchain-based applications they power are similar to growth stocks in the equities world, typically technology shares. They expect 2023 to be the year of token price divergence.