Bybit, one of the top three cryptocurrency exchanges in the world by trading volume, has released its 2024 Institutional Sector Report in collaboration with Treehouse, a premier research organisation that provides expert views into digital assets.
TakeAway Points:
- Bybit, a top cryptocurrency exchange by trading volume, has partnered with Treehouse, the industry-leading research institute offering professional insights into digital assets, and collaboratively launched its 2024 Institutional Sector Report.
- This report provides an in-depth analysis of the current state of cryptocurrency adoption around the world, examining how it compares to traditional finance (TradFi).
- The report shows increasingly aggressive on-chain activity for Bitcoin and Ethereum as well as bullish patterns in the futures market.
Bybit’s 2024 Institutional Sector Report
This paper offers a comprehensive examination of the global adoption of cryptocurrencies as it is today, comparing them to traditional finance (TradFi).
The cryptocurrency industry saw a sharp rise in value between October 2023 and March 2024, with the market capitalization rising from slightly over $1 trillion to over $2.5 trillion by the end of March. This upward trend is a result of increased investor confidence and a significant money influx into the cryptocurrency market.
The research further shows signs of increasingly aggressive on-chain activity for Bitcoin and Ethereum as well as bullish patterns in the futures market. The paper also emphasises the increased interest in AI and BTC ecosystem initiatives and examines the investing behaviours of institutions using on-chain data.
Additionally, the report also looks into the possible long-term effects of exchange-traded funds (ETFs), provides predictions for the upcoming bitcoin halving, and identifies important themes for a 2024 bull run that is beginning to exhibit optimistic early indicators of recovery.
The institutional report pointed out areas of institutional interest.
Bullish trend in the derivatives market
Despite the market’s comparatively neutral trend in March, long-term call-put biases during the 30-day period of March 2024 show an exceptionally positive attitude, with BTC and ETH typically exhibiting a substantial call premium.
This pattern implies that, going into the end of the year, investors will continue to have a generally positive view on the long-term price potential of these two big cryptocurrencies.
The ideal TradFi hedge is Bitcoin
Under 3% is always the threshold for the correlations between BTC and ETH and conventional indices, equities, or fixed income. Notably, Bitcoin shows negative return correlations with key stock indices in particular, suggesting that it might be employed as a diversification hedge in market-focused portfolios.
The S&P 500 Sharpe ratio can be raised from 2.20 to 3.15, or 43.6%, with a modest 5% allocation to BTC and ETH (equally weighted). As investors knowingly take on greater risk and add more money to their cryptocurrency holdings, this effect becomes more noticeable.
Increased Interest in Challenger Chains
Challenger chain native coins have significantly outperformed ETH since the beginning of Q4 2023. Among these challenger tokens, for instance, SOL has proven to be the best, maintaining its position as the biggest challenger chain in terms of TVL and transaction volume as of 2021.
Boost Funding for Projects AI, Gaming, and Infrastructural Projects
In the bitcoin space, venture capital (VC) financing has significantly rebounded. The number of venture capital agreements rose by 21% to 174 in the fourth quarter of 2023, and reported funding grew by 29% to $1.42 billion. Compared to the fourth quarter of 2023, there were an extra 36% more deals involving financing revealed in the first quarter of 2024, totaling $1.94 billion.
Large sums of money are being drawn to infrastructure initiatives as the primary focus of venture capital investments, which are meant to support the fundamental components of the blockchain ecosystem. These initiatives, which cover a wide range of sectors and include blockchain data providers and hardware wallets, give vital answers to problems facing the sector and encourage creativity.
The integration of cryptocurrencies with the traditional market presents continual hurdles for both newcomers and TradFi users, requiring them to navigate through increasing levels of complexity. To stay ahead of this changing environment, you must remain informed.
