Institutional Traders Divided Over Bitcoin & Ether: A Bybit Study

• Bitcoin Grabs Institutional Traders' Interest, Report Indicates Mixed Feelings for Ether and Altcoins
• Significant Increase in Bitcoin Holdings by Institutional Traders
• Institutions Exhibit Reluctance towards Altcoins
• Ethereum Holdings in Decline
• Bitcoin and Ether Year-to-Date Performance
• Shift in Asset Allocation

Bitcoin Grabs Institutional Traders' Interest, Report Indicates Mixed Feelings for Ether and Altcoins

A recent study by Bybit Research presents evidence of institutional traders' increased interest in Bitcoin$42,260 -0.64% (BTC), mixed feelings about Ether (ETH), and dwindling enthusiasm for altcoins.

Significant Increase in Bitcoin Holdings by Institutional Traders

During the initial three-quarters of 2023, institutional traders practically doubled their bitcoin holdings, making up 50% of their assets as of September. This surge was propelled by bullish market sentiment and expectations of the Securities and Exchange Commission (SEC) greenlighting a spot BTC exchange-traded fund (ETF) in the United States. In contrast, retail traders held fewer BTC, possibly due to their higher leverage levels, as stated in Bybit's study.

Institutions Exhibit Reluctance towards Altcoins

The report revealed a general scepticism from institutional traders and large-scale bitcoin holders regarding altcoins. Despite a brief jump in May, the data indicated a consistent decline in altcoin holdings among traders. A significant drop began in August, particularly among institutions, suggesting a cautious attitude towards these highly volatile assets.

Ethereum Holdings in Decline

On the other hand, Ether holdings have steadily decreased since the Shapella upgrade of the Ethereum$2,315 -2.42% blockchain. However, there was a brief increase among institutional traders in September, sparked by a favourable crypto outlook following ETF-related news.

Bitcoin and Ether Year-to-Date Performance

Bitcoin and Ether have seen significant price increases this year, with bitcoin up about 140% and ether rising by 87%.

Shift in Asset Allocation

An October report from K33 Research indicated a change in stance on asset allocation, suggesting a return to bitcoin due to ether's continued slump against BTC since July 2022 and a lukewarm reception for the newly launched futures-based ETH ETFs. The report concluded with the recommendation, We believe it's time to pull the brakes on ETH and rotate back into BTC amid ether's ongoing underperformance.

Edited by Jonathan Stoker