The cryptocurrency market is picking up speed again after a quiet spell. According to Bybit’s Institutional Report for 2024, investor confidence is on the rise, suggesting a possible bullish trend ahead. This optimism comes after an impressive growth phase during which the total market capitalization soared from approximately $1 trillion in October 2023 to over $2.5 trillion by the end of March 2024.
The report finds that the difference between call (buy) and put (sell) prices for crypto majors over the last 30 days in March 2024 indicates a strong bullish sentiment. This pattern implies that investors are optimistic about the price growth of these cryptocurrencies as we approach the end of the year.
One major insight from Bybit’s Institutional Report indicates a optimistic perspective regarding the derivatives market. This perception is supported by heightened on-chain actions for Bitcoin (BTC) and Ethereum (ETH). The analysis of institutional crypto investments reveals an escalating curiosity towards initiatives in the Bitcoin community and Artificial Intelligence (AI) sector.
Solana’s Rise Challenges Ethereum’s Dominance
The report brings attention to the increasing importance of up-and-coming blockchains. Their native tokens are experiencing significant gains and surpassing the market dominance of Ethereum. Notably, Solana (SOL) emerges as a leading contender with its high transaction volume and Total Value Locked, illustrating this emerging trend. This development is in line with last year’s observations, hinting at possible shifts among significant blockchain players.
Starting Q4 2023, the native tokens of rival blockchains have shown remarkable improvement against Ethereum. One standout performer among these alternative tokens is Solana (SOL). This trend follows Solana’s strong performance in 2021, making it the leading challenger chain based on Total Value Locked and transaction volume.
The report portrays an optimistic outlook for the crypto market’s long-term growth, attributing the next major crypto rally in around 2024 to the introduction of Exchange-Traded Funds (ETFs) and the approaching Bitcoin halving events.
It’s intriguing how Bitcoin’s potential diversification benefits could offset risks. With correlations to conventional investments like stocks and bonds being as low as 3%, Bitcoin might shield against stock portfolio volatility.
Allocating roughly 5% of your investment to Bitcoin and Ethereum, split evenly between them, could noticeably enhance the risk-reward balance of the S&P 500. This underscores the potential benefits of holding crypto assets as part of a well-diversified portfolio in terms of risk management.
Crypto Investments Surge to $1.94 Billion in Q1 2024
In the crypto industry, there was a significant rise in Venture Capital (VC) funding deals during the last two quarters of 2023 and the first quarter of 2024. In Q4 2023, the number of deals went up by 21% to reach 174, with a total disclosed investment amounting to $1.42 billion. This represented a 29% increase from the previous quarter. The trend continued in Q1 2024, as there were 243 funding deals worth $1.94 billion – a 36% hike compared to the preceding quarter.
Venture capital investments are drawn to infrastructure projects in the blockchain sector due to their role in creating essential components of the ecosystem. Examples of these initiatives include hardware wallets, providers of blockchain data, and solutions addressing industry hurdles. As traditional finance intertwines with crypto investments, newcomers and experienced TradFi participants encounter growing challenges, according to the Bybit report.
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2024-04-18 17:43