Bybit, a cryptocurrency exchange, published its fourth-quarter report on December 4, highlighting and comparing trends observed among institutional and retail investors in the crypto space.
The report's findings reveal that about 45% of assets held by institutional traders are in stablecoins, while the remaining allocation is divided with 35% in Bitcoin, 15% in ether, and only 5% in altcoins, which encompasses digital assets other than those listed above. The report suggests that during bear markets, a significant portion of institutional traders tends to favor stable assets like stablecoins, showcasing a risk-averse approach in their asset allocation strategies.
September saw a notable surge in institutional allocations to Bitcoin, a divergence from the holding patterns seen among other user categories. Bybit attributes this surge in BTC holdings to the generally optimistic market sentiment toward Bitcoin, possibly influenced by positive legal outcomes and rising expectations of the SEC's potential approval for a spot BTC ETF.
On the same day as the report's release, Bitcoin surged past the $41,000 mark for the first time in 19 months, leading the overall market value of digital assets to surpass $800 billion. This propelled the crypto market beyond the market value of Berkshire Hathaway, a multinational conglomerate, positioning it behind Meta (formerly Facebook) and other corporations like Nvidia. Bybit's report also indicates that retail traders maintain the smallest share of Bitcoin compared to other user categories. Conversely, retail investors tend to hold more stablecoins. Although stablecoins remain a substantial portion of institutional portfolios, there is a trend indicating a slight decline in their holdings.
Earlier this year, Bybit announced a user base milestone of 20 million, securing its position among the top 10 cryptocurrency exchanges globally by trading volume in the previous year. The rising price of Bitcoin seems to be paralleled by increased institutional interest, as evidenced by reports of Brazil’s largest bank, Itaú Unibanco, launching BTC trading services for its clients through its investment platform on December 4.
