Institutions Double Bitcoin Holdings in 2023: Bybit Report

Bybit, the third-largest cryptocurrency exchange worldwide in terms of trading volume, has unveiled a new research study that delves into the adaptive strategies employed by traders amidst fluctuating market conditions. Titled “Navigating Bull and Bear Markets — A Dive Into Asset Allocation,” this analysis, utilizing Bybit’s exclusive data, marks the pioneering initiative of such research undertaken by a crypto exchange.

The comprehensive report scrutinizes the asset allocation strategies adopted by distinct groups — institutions, VIPs, and retail traders, particularly during the volatile market landscape since December 2022.

Key discoveries from the study include:

• Institutional Investors: These entities primarily allocate 45% in stablecoins, 35% in Bitcoin, and 15% in Ether, underscoring a focus on liquidity and strategic diversification. Remarkably, their Bitcoin holdings witnessed nearly a twofold increase in the initial three quarters of 2023.
• Ether Trends: A decline in institutional interest in Ether is observed, yet potential market developments, such as the speculated BlackRock spot Ether ETF, could potentially alter this trajectory.
• Retail Trader Behavior: Retail traders exhibit a higher concentration of stablecoins in their portfolios, indicating a more cautious approach to riskier assets compared to conventional financial norms.
• Altcoin Investments: Both retail and VIP traders display greater holdings in altcoins compared to institutional investors. However, these altcoin holdings constitute a minor portion of overall portfolios, suggesting a cautious stance, possibly influenced by lingering effects from the recent bear market.

Ben Zhou,

Co-founder & CEO

“This report underscores Bybit’s dedication to empowering our users with actionable insights. Understanding the diverse strategies of market participants in navigating both bullish and bearish markets is crucial. “

We believe this research will not only enlighten our traders but also contribute to a broader understanding of market dynamics within the crypto community.