Reports show that institutional investors are shifting their focus to Ethereum, which reflects a preference towards the largest cryptocurrency, Bitcoin. Despite the recent Bitcoin rise to over $55,000Ethereum’s unique features and potential development opportunities continue to attract the interest of institutional players.
Institutions prefer Ethereum over Bitcoin
On February 24, the cryptocurrency exchange Bybit, published a research report on the asset allocation of its users. The study examined investors’ hodling and trading behavior during the period from July 2023 to January 2024. Bybit’s report also provided valuable insights into investors’ asset allocation across cryptocurrencies such as altcoins, stable coins And meme coinswhich sheds light on the specific coins that users are currently bullish or bearish on.
According to the research report, Ethereum has unexpectedly emerged as the top cryptocurrency choice for institutional investors. The report shows that ‘institutions are betting big on Ethereum’. allocate more of their money to ETH than to BTC.
Bybit revealed that the recent surge in interest in Ethereum started in September 2023, when ETH was still trading around $2,000. Subsequently, Ethereum market sentiment became more positive optimisticwith investor interest rising to around 40% by January 2024. The crypto exchange has confirmed that ETH has become the largest cryptocurrency held by institutions as of January 31.
Bybit’s report also showed that institutional investors Interest in Bitcoin started to wane following the example of the US Securities and Exchange Commission (SEC) approval of Spot Bitcoin ETFs on January 10, 2024. At the time, Bitcoin was experiencing massive selling pressure, which led to investors trimming their BTC holdings to favor other cryptocurrencies.
The over-allocation of Ethereum is reportedly attributed to investors anticipating a favorable outcome from the arrival of Ethereum Decun upgradescheduled for launch in March 2024.
Notably, Bybit revealed that it is still being determined whether the recent shift to Ethereum is a short-term maneuver or a longer move. However, it is approaching Bitcoin halving in April may add a layer of bearish risks such as projections point to Bitcoin’s significant increase in value to new all-time highs during the halving phase.
ETH price rises to $3,230 | Source: ETHUSD on Tradingview.com
Private investors think differently
Bybit’s research report also examines the asset allocation trend for retail investors on the cryptocurrency exchange. The report shows that private investors are significantly more bullish on Bitcoin than on Ethereumthus allocating more money to BTC than ETH, despite Ethereum’s recent rise in value.
Over the past week, Ethereum has done just that experienced a significant increase in its price, up more than 7% and faster than Bitcoin, indicating a potential for an extended price upward trajectory. At the time of writing, Ethereum is trading at $3,227, reflecting a 4.05% increase in the past 24 hours, according to CoinMarketCap.
While Ethereum’s massive rally has successfully increased sentiment among institutional investors, retail investors remain less influenced and choose to hold or pick up additional shares Bitcoin in their diversified portfolio of digital assets.
Featured image from Cointribune, chart from Tradingview.com
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