• Bybit has released a new investor allocation report to lend insight into trading strategies.
• Stablecoins account for the largest holdings by institutional investors followed by Bitcoin.

Bybit, the world’s third-largest crypto exchange by volume, has published research on the crypto allocation techniques used by several trading cohorts on its platform including institutions, VIPs, and regular traders. 

The study, “Navigating Bull and Bear Markets–A Dive Into Asset Allocation,” is the first of its kind to be initiated by a crypto exchange.

Insights from Bybit’s Research

Notably, the report focuses on the volatile crypto market environment since December 2022, shedding light on key trends and shifts in the crypto ecosystem. 

Bybit’s co-founder and CEO, Ben Zhou, emphasizes the significance of the research, stating that it “will not only enlighten” the exchange’s traders but “also contribute to the broader crypto community’s understanding of market dynamics.” This commitment to transparency and education aligns with Bybit’s overarching mission to empower its users with actionable insights.

The research reveals that institutional investors predominantly allocate 45% of their portfolios to stablecoins, showcasing a strong emphasis on liquidity and risk mitigation. Bitcoin (BTC), the world’s leading cryptocurrency remains a cornerstone, comprising 35% of their holdings, while Ethereum (ETH) constitutes 15%. Markedly, institutional Bitcoin holdings nearly doubled in the first three quarters of 2023, signaling a strategic and sustained embrace of the leading cryptocurrency. 

While institutions have shown a decline in interest in Ethereum, the report speculates that upcoming market developments, such as the potential BlackRock spot Ethereum ETF, could potentially reverse this trend. The crypto community eagerly awaits how these developments will impact institutional portfolios in the near future.

Retail traders, on the other hand, exhibit a more cautious approach to risk, holding a higher proportion of stablecoins. This suggests a departure from traditional finance norms, emphasizing the unique risk profile and preferences of retail participants in the crypto market.

Meanwhile, both retail and VIP traders demonstrate a higher allocation to altcoins compared to institutions. As gleaned from the report, altcoins remain a minor part of total portfolios, indicating a sense of caution, possibly stemming from the lingering impact of the recent bear market.

Bybit Demonstrates Commitment to Industry Growth

The research comes on the heels of Bybit’s recent unveiling of its dedicated Broker Program, showcasing its commitment to the crypto trading ecosystem. The program opens doors to various participants, including white-label exchanges, asset management platforms, trading terminals, and trading firms, fostering collaboration and innovation in the crypto market.

The Bybit Exchange Broker Program empowers stakeholders in its ecosystem with a suite of features that ensures operational independence and flexibility. Key offerings include user management tools, flexible commission models, and access to Bybit’s diverse product suite, spanning spot, margin, derivatives, and more.

Bybit’s commitment to industry growth is further emphasized through strategic partnerships, such as the one with Paradigm, an institutional liquidity network for crypto derivatives traders. The partnership introduces a fee-slashing promotion targeting new and professional options traders, showcasing Bybit’s dedication to improving offerings for institutional clients.

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