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Ether attracts institutional investment, Bitcoin remains a retail favorite: Bybit

This suggests that institutions are increasingly interested in Ether, which may be due to the growing popularity of Ethereum-based platforms and applications and increased activity in the DeFi sector.

Date: 2024-02-27 Author: Łukasz Michałek
Ether attracts institutional investment, Bitcoin remains a retail favorite: Bybit

According to Bybit‘s research, the growing institutional trend toward Ether is due to the expected benefits of the Dencun upgrade to the Ethereum blockchain.

on March 13, Dencun is expected to unveil a number of Ethereum(EIP) enhancements, including proto-danksharding, which aims to reduce the cost of Layer 2 transactions for developers.

The report said: “While the upcoming update is unlikely to have the same impact as the merger, a potential successful implementation is likely to have a positive impact on ETH and other Layer 2tokens.”

In April 2023. Ethereum, also known as Shapella, received its last major update. Its ability to allow validators and users to remove erected ether from the network was a milestone.

According to Bybit , the rise in Ether hopes began in September 2023 and is already in about 40% of institutional portfolios as of January 2024. In addition, the team said that expectations for SEC approval of an Ether ETF by the end of 2024 are raising sentiment about Ether.

The study reports that companies began reducing their Bitcoin holdings in early December 2023, when the cryptocurrency peaked at $40,000. It is unclear whether the shift from Bitcoin to Ether is a short-term tactical adjustment or a strategic reallocation for the long term.

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The report also includes a breakdown of asset allocations. It found that from July 2023 to January 2024, institutions allocated forty percent to Bitcoin, forty percent to Ether, 15 percent to stablecoins and five percent to altcoins.

Institutions have increased the concentration of their wallets on Bitcoin and Ether from 50 percent to 80 percent, Bybit says. Retail users are concentrating more on Ether and Bitcoin, which account for about 35% of their total portfolio.

The report found that retail users have a very different investment style compared to institutions, with a greater focus on altcoins and more cash (e.g., a higher percentage of stablecoins).

Retail users also showed more optimism towards Bitcoin compared to Ether . Moreover, from December 2022 to September 2023, retail users did not reduce their positions in Bitcoin.

Bybit stated: “Retail users’ distinctive investment style may be related to higher leverage, which requires a higher level of portfolio assets as collateral (INS leverage at ~12; retail users’ leverage level at ~20).”

Retail users still have larger positions in altcoins compared to Bitcoin and Ether. However, most users are wary of them.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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