By
Svetlana Soroka
April 30th, 2024
The report highlights the growing relevance of emerging blockchains. Their native tokens exhibit substantial growth, surpassing Ethereum.
The crypto market is regaining momentum after a dormant phase. “Bybit Institutional Report 2024” indicates revived investor confidence, signaling a potential bullish trend. This optimism follows a remarkable growth period, where the overall market capitalization surged from around $1 trillion in October 2023 to over $2.5 trillion by March 2024’s conclusion.
“Examining the long-term call-put skews over the 30 days in March 2024 reveals a notably bullish sentiment,” says the report. “This trend suggests that investors maintain a generally bullish outlook on the long-term price potential of these two crypto majors toward the end of the year.”
One of the key takeaways from the Bybit Institutional Report reveals a positive outlook in the derivatives market. This finding aligns with increased on-chain activity for Bitcoin (BTC) and Ethereum (ETH). By analyzing institutional crypto investment behavior, the report shows growing interest in projects within the Bitcoin ecosystem and Artificial Intelligence (AI) field.
Solana’s Rise Challenges Ethereum’s Dominance
The report highlights the growing relevance of emerging blockchains. Their native tokens exhibit substantial growth, surpassing Ethereum. Solana (SOL), the top challenger chain by transaction volume and Total Value Locked (TVL), stands out as a prime example of this trend. This trend aligns with observations from 2021, suggesting a potential shift among major blockchain players.
“Since the beginning of Q4 2023, native tokens of challenger chains have experienced significant performance as compared to ETH,” Bybit wrote. “For example, SOL emerged as the top performer among these challenger tokens, continuing the trend observed in 2021 as the biggest challenger chain by TVL and transaction volume.”
The report paints a positive picture for the long-term future of the crypto market and sees the launch of Exchange-Traded Funds (ETFs) and the upcoming Bitcoin halving as the primary drivers for the next crypto bull run in 2024.
Interestingly, the potential diversification benefits offered by Bitcoin could help balance risk. Bitcoin has low correlations with traditional investments like stocks and bonds, under 3%. This suggests Bitcoin may protect against volatility in stock-heavy portfolios.
In fact, allocating just 5% to Bitcoin and Ethereum (equally) could significantly improve the risk-reward ratio of the S&P 500. This highlights the potential risk management advantages of including crypto assets in a diversified portfolio.
Crypto Investments Surge to $1.94 Billion in Q1 2024
Venture Capital (VC) funding see a notable uptick in the crypto industry. During the final quarter of 2023, funding deals increased by 21% to reach 174 transactions, with disclosed funding amounts totaling $1.42 billion, an expansion of approximately 29%. The Q1 2024 witnessed an additional surge, with 243 deals securing $1.94 billion in disclosed investments, marking a 36% rise compared to Q4 2023.
Infrastructure projects attract much of the venture capital investments as they build essential blockchain ecosystem components. These initiatives include hardware wallets, blockchain data providers, and solutions for industry obstacles. As traditional finance merges with crypto investments, newcomers, and seasoned TradFi participants face increasing challenges, the Bybit report notes.