Ethereum Hits 22-Month High as Bybit Says Institutions Now Prefer ETH Over Bitcoin

ethereum price soared to a 22-month high as a new report from Bybit Research said institutional investors are favoring the altcoin leader over bitcoin (btc).

eth ethereum“>leap more than 6% in the last 24 hours to trade at $3,262.08 at 6:15 am EST as the report said that there has been a significant change in investor sentiment since December.

<img decoding="async" alt="ethereum ETF: The Next Big crypto Opportunity? – Techinfo” src=”https://www.techopedia.com/wp-content/uploads/2024/02/ethereum-ETFs.jpg”/><img decoding="async" src="https://www.techopedia.com/wp-content/uploads/2024/02/ethereum-ETFs.jpg” alt=”ethereum ETF: The Next Big crypto Opportunity? – Techinfo”/>

The report says that in January institutional investors allocated 39.82% of their holdings to eth, while 39.49% were allocated to bitcoin.

Historic shift towards ethereum

While the difference is small, it marks a historic shift from btc, which had previously been heavily favored, towards the second-largest cryptocurrency by market capitalization, eth. The upcoming Dencun update was cited as a possible reason behind the change.

“Dencun will be launched in March 2024, which helps reduce the transaction cost at layer 2 with a method called 'proto-sharding,'” he said. “The possible successful implementation will likely bring a tailwind for ethereum and others.” Layer 2 tokens.

ethereum?src=hash&ref_src=twsrc%5Etfw”>#ethereum It's on the verge of its Dencun update!

What projects will benefit from this update?

Find out now #AlertaSectorTrends pic.twitter.com/whwareHxQ3

—Bitget (@bitgetglobal) February 27, 2024

eth The deflationary supply, along with its low supply on exchange platforms and increased staking activity, has also allowed the altcoin to outperform btc with a 33% rally so far this year, according to the report.

Investors abandon altcoins

Despite eth's bullish outlook, the rest of the altcoin market has failed to maintain investor interest. Bybit said institutions have decreased their exposure to smaller-cap altcoin categories such as meme coins, artificial intelligence, and BRC-20 tokens, despite the impressive returns these cryptocurrencies posted in 2023.

Instead, institutional investors have focused their attention on assets with higher degrees of stability. These more stable asset classes include layer 1 tokens as well as decentralized financial protocols.

Bybit's research also suggests that neither Neither retail nor institutional investors are very enthusiastic about Solana (SOL), even after it erased many of the losses suffered during the past bear cycle.

Both retail and institutional investors have been profiting since SOL recovered to $40 and after it took a dominant position in both portfolios in the third quarter of last year.

At the end of January, SOL represented only single digits of the institutions' total portfolio, he said.

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