Ethereum hits 22-month high as Bybit says institutions now prefer ETH over Bitcoin.

Ethereum prices surged to a 22-month high as institutional investors are favoring the altcoin leader over Bitcoin (BTC), according to a new Bybit Research report.

ETH jumped up It’s up more than 6% in the last 24 hours, trading at $3,262.08 as of 6:15 a.m. EST. report They say something significant happened. Changes in investment sentiment since December

According to the report, in January institutional investors allocated 39.82% of their holdings to ETH and 39.49% to Bitcoin.

Historical changes toward Ethereum

Although the difference is small, it represents a historic shift from previously popular BTC to ETH, the second-largest cryptocurrency by market capitalization. The upcoming Dencun upgrade was cited as one of the reasons for the change.

“Dencun is expected to launch in March 2024 and will help reduce transaction costs at layer 2 through a method called ‘proto-dank sharding.’” “A potentially successful implementation would likely bring a tailwind to Ethereum and other layer 2 tokens.”

#Ethereum I’m on the verge of a Dencun upgrade!

📈 Which projects will benefit from this upgrade?

Find out now👇 #TrendingSectorAlert pic.twitter.com/whwareHxQ3

— Bitget (@bitgetglobal) February 27, 2024

ETH The report stated that deflationary supply, coupled with low supply on exchange platforms and increased staking activity, has enabled the altcoin to outperform BTC, resulting in a 33% year-to-date rally.

Investors Abandon Altcoins

Despite the bullish outlook for ETH, the rest of the altcoin market failed to maintain investor interest. Bybit said that despite the impressive returns these cryptocurrencies posted in 2023, institutions have reduced their exposure to small-cap altcoin categories such as meme coins, artificial intelligence, and BRC-20 tokens.

Instead, institutional investors shifted their attention to assets with higher stability. These more stable asset classes include layer 1 tokens and decentralized finance protocols.

Bybit’s research shows that neither is the case. Retail and institutional investors are very fond of Solana (SOL), even after wiping out many of the losses it suffered during the last bear cycle.

Both retail and institutional investors are benefiting since SOL bounced back to $40 and took over a dominant position in both portfolios in the third quarter of last year.

As of the end of January, SOL said it accounted for only a single-digit share of the overall institutional portfolio.

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