Institutional Investors Prefer Bitcoin, Ether Over Altcoins — Here’s Why

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Insti­tu­tion­al investors are wary of alt­coins and pre­fer hold­ing Bit­coin BTC/USD and Ethereum ETH/USD.

Accord­ing to cryp­to exchange Bybit, Insti­tu­tion­al Investors (INS) increased their Bit­coin hold­ings dur­ing the first three quar­ters of 2023.

In Sep­tem­ber alone, a stag­ger­ing 50% of INS’s asset port­fo­lio was allo­cat­ed to Bitcoin.

This shift aligns with the pos­i­tive mar­ket sen­ti­ment towards Bit­coin, spurred by favor­able law­suit out­comes and the antic­i­pa­tion of the SEC’s poten­tial approval of a spot BTC ETF. It also sharply con­trasts with the asset allo­ca­tion strate­gies of oth­er traders, par­tic­u­lar­ly retail investors.

Ether ETH/USD, mean­while, has seen a decline in inter­est since the Shapel­la update ear­li­er this year.

Despite a sta­ble price post-update, Ether hold­ings have con­sis­tent­ly fall­en across most trad­er categories.

How­ev­er, an unusu­al surge in Ether hold­ings was not­ed among INS traders from Sep­tem­ber, pos­si­bly reflect­ing a broad­er opti­mistic sen­ti­ment towards cryptocurrencies.

Also Read: Colom­bia Looks To Trans­form Into A Blockchain Haven, Pres­i­dent Gus­ta­vo Petro Paves The Way For Tech Supremacy

Sta­ble­coins: The report also sheds light on the sta­ble­coin hold­ing pat­terns of dif­fer­ent trad­er cat­e­gories. Retail traders have con­sis­tent­ly shown a high­er per­cent­age of sta­ble­coin hold­ings, influ­enced by their lever­age practices.

In con­trast, insti­tu­tion­al investors have demon­strat­ed a strate­gic deploy­ment of their sta­ble­coin reserves into Bit­coin and Ether, par­tic­u­lar­ly notice­able in September.

This trend sug­gests a grow­ing con­fi­dence among insti­tu­tion­al play­ers in the mar­ket’s pos­i­tive trajectory.

Cau­tion: Insti­tu­tion­al-investor inter­est in alt­coins has gen­er­al­ly been subdued.

Both nor­mal users and VIPs ini­tial­ly increased their hold­ings in oth­er tokens dur­ing the first half of the year, but this trend reversed in the lat­ter months, drop­ping to lev­els even low­er than those record­ed in December.

In light of these shift­ing trends and the over­all down­beat mar­ket sen­ti­ment, Bybit’s research under­scores the impor­tance of opti­mized asset allo­ca­tion strategies. 

Read Next: Binance Tips Off ‘VIP’ Traders About $4B Set­tle­ment With The US Gov­ern­ment: Report

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