Institutions Ignoring Altcoins, Betting on Bitcoin: Bybit Research

According to a survey conducted by Baybit, institutional traders expressed significant bullishness towards Bitcoin, mixed feelings towards Ether and a general air of skepticism towards altcoins.

From December 2022 to September 2023, the study provides an in-depth look at business characteristics and asset allocation amid market volatility.

Institutional traders favor BTC, shunning alts

The survey revealed significant volatility in major cryptocurrencies by institutional traders. Bitcoin holdings among this group saw a significant increase, doubling in the first three quarters of 2023.

September had a turning point, with half of institutional traders' portfolios allocated to Bitcoin. This coincides with positive market sentiment on major crypto, expectations of regulatory developments and the potential approval of a Bitcoin ETF.

In contrast, Ether's appeal declined after Chappella in April, with percentages of holdings at most traders falling. However, in September, a surprising increase in Ether holdings was observed by institutional traders, which indicates a broader sentiment for cryptocurrencies.

Stablecoins present a different picture. Retailers are constantly choosing, especially in uncertain market conditions. On the other hand, institutional traders have reduced their holdings of stablecoins in bear markets, showing a systematic change, possibly indicating a masterful market period.

This contrast was even more evident in September, when institutional traders significantly reduced their stablecoin holdings in line with the surge in Bitcoin and Ether investments.

Altcoins, however, have not found favor with institutional traders. Demand for these alternative tokens is consistently low, with a brief spike in May 2023.

UTA's role in promoting market adaptation

According to Baybit research, the United Trading Account (UTA) offers a solution for navigating market volatility, allowing for flexible consumption adjustments based on market conditions.

The study highlights UTA's effectiveness in managing asset allocation amid volatile markets.

Bybit's research focuses on active users, especially those who make more than 20 monthly transactions. It analyzes critical periods in depth (January, March, April and June 2023) and underground markets (December 2022, May and August 2023).

The study carefully examined the trading behavior of consumers across various wealth segments, including institutional traders (INS), VIP traders with assets over $50K, and retail traders.