Institutional Traders Show Bullish Sentiment Towards Bitcoin
A recent study conducted by Bybit reveals that institutional traders have expressed a significant bullish sentiment towards Bitcoin. The study also found mixed sentiments regarding Ether and a general air of skepticism towards altcoins.
The study, which covers the period from December 2022 to September 2023, provides valuable insights into the trading behaviors and asset allocation of institutional traders during significant market fluctuations.
Institutional Traders Favor BTC, Moving Away from Alts
The study highlights a notable shift in the approach of institutional traders towards major cryptocurrencies. The research shows that Bitcoin holdings among this group have doubled in the first three quarters of 2023.
September marked a turning point, as half of institutional traders’ portfolios were allocated to Bitcoin. This aligns with the positive market sentiment towards Bitcoin, driven by expectations of regulatory advancements and the potential approval of a Bitcoin ETF.
On the other hand, Ether’s appeal has decreased post-Shapella in April, with a lower holding percentage among most traders. However, there was a surprising surge in Ether holdings by institutional traders in September, indicating a broader upbeat sentiment towards cryptocurrencies.
Stablecoins presented a different picture. Retail traders consistently preferred them, especially in uncertain market conditions. However, institutional traders displayed a strategic shift by reducing stablecoin holdings in bear markets, possibly indicating adept market timing.
This contrast became more apparent in September when institutional traders significantly reduced their stablecoin holdings while increasing their investments in Bitcoin and Ether.
Altcoins did not find favor with institutional traders. The interest in these alternative tokens has been consistently low, except for a brief spike observed in May 2023. This trend indicates a clear preference among institutional traders for more established cryptocurrencies.
UTA’s Role in Enhancing Market Adaptability
Bybit’s research emphasizes the United Trading Account (UTA) as a solution for navigating market volatility. UTA allows for flexible leverage adjustments according to market conditions, effectively managing asset allocation amidst fluctuating markets.
The study highlights the effectiveness of UTA in preventing unnecessary liquidations during high volatility periods, thus enhancing market adaptability.
The research focused on active users, specifically those who conducted more than 20 monthly trades. It analyzed critical periods in both bullish and bearish markets to understand the trading behavior of institutional traders, VIP traders, and retail traders across different asset classes.
Hot Take: Institutional Traders Show Confidence in Bitcoin and Ether
The research by Bybit provides valuable insights into the sentiment and behavior of institutional traders towards cryptocurrencies. The study reveals that institutional traders have shown a significant bullish sentiment towards Bitcoin, with a doubling of Bitcoin holdings in the first three quarters of 2023.
While Ether’s appeal has decreased among most traders, there was a surprising surge in Ether holdings by institutional traders in September. This indicates a broader positive sentiment towards cryptocurrencies.
Overall, the study highlights a clear preference among institutional traders for more established cryptocurrencies like Bitcoin and Ether, while altcoins have failed to gain traction. Additionally, Bybit’s United Trading Account (UTA) offers a solution for managing asset allocation amidst market volatility, enhancing adaptability for traders.
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