Ether Draws Institutional Bullishness, Bitcoin Remains Retail Favorite: Bybit
Research from Bybit highlights a growing institutional bullishness on Ether, driven by the expected positive impact of the Dencun upgrade on the Ethereum blockchain.
Dencun, slated for March 13, will introduce various Ethereum Improvement Proposals (EIPs) including proto-danksharding aimed at reducing Layer-2 transaction costs, per developers.
“While the upcoming upgrade will not likely lead to the same impact as the Merge, the potential successful implementation will likely bring a tailwind to ETH and other Layer 2 tokens,” the report said.
The last significant upgrade to Ethereum, known as Shapella, took place in April 2023. It marked a milestone as it allowed users and validators to withdraw their staked ether from the network.
According to Bybit, optimism towards Ether began in Sept. 2023 and picked up momentum in Jan. 2024, reaching about 40% of institutional portfolios. The team also noted that expectations for the SEC’s approval of a Spot Ether ETF by the end of 2024 are adding to the positive sentiment surrounding Ether.
Bybit said that institutions started reducing their Bitcoin holdings in early Dec. 2023, at a time the asset tested a crucial resistance level of $40k. Thereafter, their Bitcoin holdings continued to decline. It remains unclear whether this shift from Bitcoin to Ether represents a short-term tactical adjustment or a medium-term strategic reallocation.
With the Bitcoin halving coming up in April 2024, it’s risky to be negative about the crypto asset because the halving is generally seen as a good thing, Bybit indicated.
The report also provided a breakdown of asset allocations. It showed that institutions allocated about 40% to Bitcoin, 40% to Ether, 15% to stablecoins, and 5% to altcoins from July
