Institutional Traders Favor Bitcoin and Ethereum, Remain Skeptical of Altcoins
Institutional traders have increased their holdings of Bitcoin (BTC) and Ethereum (ETH) this year but continue to be skeptical about alternative cryptocurrencies, according to a research conducted by Bybit.
The research reveals that institutional traders currently allocate 45% of their crypto assets in stablecoins, while Bitcoin and Ethereum make up 50% of their holdings, and altcoins only account for 5%.
This cautious approach may be due to the flight to safer assets in a bear market, as stated by the research.
Institutional traders have doubled their Bitcoin holdings in the first three quarters of 2023, with 50% of their crypto portfolio being comprised of Bitcoin in September.
This behavior can be attributed to the positive market sentiment surrounding Bitcoin, fueled by the potential approval of a spot Bitcoin exchange-traded fund (ETF).
Institutional traders have also started accumulating Ethereum in September, thanks to the optimistic sentiment generated by ETF news.
Conversely, the percentage of assets allocated by institutions to altcoins has sharply declined.
Retail Traders Lower Bitcoin Holdings Due to Higher Leverage Levels
On the other hand, retail traders have decreased their Bitcoin holdings due to higher leverage levels. Researchers believe that this trend is the reason behind this reduction.
While retail traders hold the largest amount of stablecoins, institutional traders are reducing their stablecoin holdings and shifting their investments towards Bitcoin and Ethereum, reflecting a growing optimism towards the crypto market.
Hot Take: Institutional Traders Favor Leading Cryptocurrencies While Remaining Skeptical of Altcoins
Institutional traders have displayed a preference for Bitcoin and Ethereum, increasing their holdings in these leading cryptocurrencies. This can be attributed to positive market sentiment and the potential approval of a Bitcoin ETF. However, institutional traders remain cautious when it comes to altcoins, with a significant decrease in their allocation towards these cryptocurrencies. On the other hand, retail traders have reduced their Bitcoin holdings due to higher leverage levels. Overall, this indicates a growing optimism towards the crypto market, but a more selective approach by institutional traders when it comes to altcoins.
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