Stablecoin holdings among investors fell from 50.2% in December to 42.8% in May, Bybit's Q2 Asset Allocation report reveals. Bitcoin remains the largest single asset held, accounting for 26% of total assets.
That should not come as a surprise, but excluding stablecoins, Bitcoin and Ethereum comprise 61% of users' crypto investments. Retail traders favor Bitcoin over Ethereum.
This preference persists despite renewed optimism for ETH Spot ETFs, analysts note.
Institutional positions in Bitcoin and Ethereum are more concentrated than retail traders'. Holdings stand at 39.4% and 20.9% respectively as of May.
The report highlights institutional investors' clear preference for Bitcoin. Satoshi would be proud of us. His creation remains the leading crypto despite all the new winds blowing in the crypto world recently.
Since Bitcoin Spot ETF approval in January 2024, institutional Bitcoin holdings have increased. It clearly shows us that ETFs were really the way to go.
Ether positions have decreased. This suggests institutions view Bitcoin as more attractive. Concerns about Ether Spot ETFs not including staking rewards may be a factor.
Retail traders demonstrated market timing skills during the March-April 2024 correction. They reduced Bitcoin positions in March and gradually increased them in April and May. This indicates some avoided the pullback and capitalized on the market's rebound.
The report also examined asset allocation strategies across user segments. Institutions hold more concentrated positions in Bitcoin and Ethereum. Their concentration ratio increased from 25.4% in December 2023 to 39.4% in May 2024.
Retail traders maintain more diversified portfolios. However, they show a slight increase in concentration due to preference for new altcoins. Altcoin holdings fluctuated, initially dropping from 25% in January 2024 to 20.9%, before rebounding to 22.5% in May 2024.
New trading narratives drove these fluctuations. Bitcoin Layer 2 projects and meme tokens gained popularity among retail traders. Institutions increased altcoin positions in Q2 2024, primarily through new token investments.
Stablecoin advocates argue for their potential to disrupt payments. PayPal introduced its PYUSD stablecoin last year to facilitate instant, low-cost transfers. Stripe announced on April 25 that it would allow merchants to accept stablecoins for online transactions. Stripe's initiative starts with USDC stablecoins on Solana, Ethereum, and Polygon blockchains.