The third-largest cryptocurrency exchange in the world by volume, Bybit, has published new research that analyzes how traders modify their tactics in response to shifting market circumstances. The first to be started by a cryptocurrency exchange, “Navigating Bull and Bear Markets — A Dive Into Asset Allocation,” makes use of Bybit’s exclusive data.
The report offers a thorough analysis of the asset allocation tactics used by various groups, including institutions, VIPs, and retail traders. It focuses in particular on the turbulent market conditions that have existed since December 2022.
Significant findings consist of:
Institutional Investors
Institutions prioritize liquidity and strategic diversification, holding 45% of their assets in stablecoins, 35% in Bitcoin, and 15% in Ether. Notably, throughout the first three quarters of 2023, their Bitcoin holdings almost doubled.
Trends in Ether
It has been seen that institutional interest in Ether is declining; but, future market actions, such as the reported BlackRock spot Ether ETF, may reverse this trend.
Retail Trader Behavior
Compared to conventional finance standards, retail traders are shown to retain a higher proportion of stablecoins, indicating a more cautious allocation to risky assets.
Investments in Altcoins
Retail and VIP traders exhibit greater holdings of cryptocurrencies than institutional investors do, although they still make up a small portion of overall portfolios, suggesting caution—possibly as a result of lingering effects from the previous crypto winter.
Ben Zhou, co-founder and CEO stated:
“This report is a testament to Bybit’s commitment to empowering our users with actionable insights. Understanding how different market participants navigate the complexities of bull and bear markets is crucial. We believe this research will not only enlighten our traders but also contribute to the broader crypto community’s understanding of market dynamics.”
The full report can be found here.
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