Ether attracts institutional investors, Bitcoin in decline

The crypto platform Bybit has published a study concerning the dynamics of institutional investments in bitcoin (BTC) and ether (ETH), currently booming. She roughly notes both the increase in interest in ether and the decrease in allocations to bitcoin, within institutional portfolios.

Institutional investors abandon bitcoin for ether

Crypto firm Bybit recently released a report on its users’ asset allocations. It signals a notable shift by institutional investors regarding their digital asset portfolios, between July 2023 and January 2024.

During this period, investments in bitcoin and ether made a significant jump from 50% to 80%. This dynamic reflects a significant increase in institutional optimism towards these leading cryptos. The report notes that each of these digital assets accounted for half of the new allocations. Altcoins and stablecoins make up the remaining 20%, split at 15% and 5% respectively.

Another key element highlighted by The report : the crucial transition of institutional investors from bitcoin to ether. This dynamic is particularly evident from September 2023, with ether emerging as the main asset.

It represented approximately 40% of institutional portfolios through January 2024. This trend is associated with the positive outcomes that institutions are predicting for Ethereum. Notably with the Dencun upgrade and possible approval of a spot Ethereum ETF. This narrative is corroborated by the reduction in bitcoin allocation observed from the beginning of December 2023.

Bybit reveals growing interest from institutional investors in ether at the expense of bitcoin

Divergent Crypto Investing Approach

Beyond the ambivalence of the institutional investment dynamics mentioned above, the Bybit report tells us something else about the investment approach itself. The platform notes a divergence among investors regarding their investment style.

According to the study, there has been a concentration of investments in bitcoin and ether of 35% on average until January 31, 2024. It does appear that investors have a clear preference for altcoins and stablecoins. This reflects a distinct investment policy that prioritizes riskier assets and liquidity.

Despite a lower average concentration in BTC and ETH, retail investors displayed more bullish sentiment towards bitcoin than towards ether. Additionally, institutional capital allocation has undergone a notable transformation regarding memecoins, artificial intelligence (AI) tokens, and BRC-20 tokens.

The Bybit study signals an almost complete divestment by institutions from these highly volatile token categories. Which highlights a strategic shift from speculative assets to much more established cryptos in the crypto ecosystem such as bitcoin and ether.

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