- The share of Bitcoin and Ethereum in institutional portfolios increased from 50% to 80%.
- Open interest in options for the second-largest cryptocurrency by market capitalization reached a new all-time high.
- The growth is linked to increased volatility, expectations for the Dencun upgrade, and prospects for ETF approval.
Ethereum has taken the largest share among cryptocurrencies in the investment portfolios of financial institutions, attributed to the upcoming Dencun upgrade. This conclusion is drawn from a report by Bybit.
Representatives of the exchange assessed client reports as of January 31.
According to analysts, the rotation of funds from other altcoins and Bitcoin into the second-largest cryptocurrency by market capitalization began in December.
Primarily, meme coins, L2, AI, and BRC-20 tokens were reduced after their active growth throughout 2023.
Bitcoin held the second position after Ethereum in institutional portfolios, contrasting with the stance of retail investors, who preferred digital gold.
Portfolio Comparison
The two main cryptocurrencies accounted for 79.3% of institutional AUM compared to 34.56% among ordinary digital asset enthusiasts. The latter focused on altcoins (28.8%) and stablecoins (36.6%).
The share of Bitcoin and Ethereum in institutional portfolios grew from 50% to 80%. DeFi tokens and stablecoins also showed positive dynamics.
Limited Interest in Solana
Despite Solana’s market-leading growth in the second half of 2023, interest in the asset from both large and retail clients remained minimal.
Analysts also noted a decline in the share of altcoins in the portfolios of all client categories in January.
Bybit presented its report just before the price of the second-largest cryptocurrency by market capitalization surpassed the psychological mark of $3000.
Ethereum Options Set Records
According to The Block, open interest (OI) in Ethereum options on the top five largest exchanges, excluding the CME, reached an ATH.
According to Coinglass, OI on Binance reached $3.77 billion, while on Bybit it was $2.15 billion.
In a comment for the publication, YouHodler’s Head of Markets, Ruslan Lienha, explained the dynamics by the increased volatility of the asset, which attracts high-risk traders.
He estimated that the average daily figure for the second-largest cryptocurrency by market capitalization reached 2%—twice that of Bitcoin.
“As the momentum of the digital gold rally weakens and its price fluctuations decrease, active traders are shifting to Ethereum,” he explained.
ETFs as a Growth Factor
The specialist also mentioned expectations for the Denсun upgrade and ETF approval as additional drivers.
Previously, FOX Business predicted the registration of spot Ethereum ETFs by May.
Seiffart estimated this probability at 60%, while his colleague Eric Balchunas was slightly more optimistic at 70%. Morgan Creek Capital CEO Mark Yusko was more pessimistic, suggesting a 50/50 chance.
Analysts from JPMorgan and TD Cowen also expressed doubts about the imminent approval of such products.
Earlier, specialists from Standard Chartered suggested that the SEC would register spot Ethereum funds on May 23, with the cryptocurrency’s price reaching $4000 by then.