Institutional Traders Favor Stablecoins over Bitcoin: Insights from Bybit’s Q4 Report
Summary:
Bybit's Q4 report highlights investment trends among its institutional and retail traders. The report reveals that institutional traders have 45% of their assets in stablecoins, with 35% in Bitcoin (BTC), 15% in Ether (ETH), and only 5% in altcoins. Despite a cautious approach in portfolio allocation, a surge in Bitcoin holdings among institutional traders was observed in September. The exchange also noted that Bitcoin's price surpassed $41,000 for the first time in 19 months. Although retail traders have lower Bitcoin holdings, there's an overall increment in interest towards digital assets from major institutions, signaled by Brazil's largest bank, Itaú Unibanco, launching a Bitcoin trading service.
On December 4, Bybit, the cryptocurrency exchange, published its Q4 report, shedding light on behavioral trends amongst its institutional and retail investors. The report revealed that roughly 45% of institutional trader's assets were invested in stablecoins, while the rest was distributed as 35% in Bitcoin (BTC), 15% in Ether (ETH), and a minimal 5% in other digital assets termed as altcoins by the exchange. The progressive move towards safer assets such as stablecoins in a bearish market scenario might be an explanation for this cautious asset distribution by traders. However, an increased allocation in Bitcoin by institutional traders was observed in September, distinguishing their investment pattern from other user categories. Information Credit: Bybit
In the context of a positive market outlook towards Bitcoin, the increase in institutional BTC holdings aligns well. This can be linked to optimistic lawsuit results, increasing anticipation for SEC’s approval of a spot BTC ETF. On the very day, Bitcoin soared above $41,000 for the first in 19 months. Consequently, the cumulative market cap of the digital asset reached $800 billion, surpassing Berkshire Hathaway, a real multinational holding company, to closely tail companies like Meta (previously known as Facebook) and Nvidia.
However, Bybit observations showed that retail investors held the smallest Bitcoin proportion vis-à-vis other user types. Conversely, these retail traders tended to have more stablecoin holdings. Though a significant chunk of institutional portfolios also possessed stablecoins, a decline in such portfolio composition was reported. Earlier this year, the user base of the exchange touched 20 million. Additionally, it ranked amongst the top ten global cryptocurrency exchanges by volume, last year.
As Bitcoin’s price escalates, heightened interest is being exhibited by major institutions. In line with this, Itaú Unibanco, Brazil’s largest bank, is reportedly launching a Bitcoin trading service for its clients via its investment platform on December 4. Other noteworthy developments include a significant 65% slump in Web3 Games in 2023, but promising real hits are expected to make a splash. Moreover, the Web3 Gamer NFT for NFL Rivals raked in $26M.
Published At
12/4/2023 1:51:12 PM
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