Bybit, the world&'s third-largest crypto exchange by volume, shared its insights into trading trends in the crypto market based on the platform&'s proprietary data. The report titled "Navigating Bull and Bear Markets: A Dive Into User&'s Asset Allocation" provides a rough overview of strategies employed by institutional, VIP, and retail investors in the period between December 2022 and September 2023.

The key finding is that institutional traders (INS) increased the percentage of Bitcoin in their crypto holdings by more than twofold. The transition to BTC in this group accelerated in the third quarter of 2023. At the end of September, INS had about half of their portfolio allocated to Bitcoin and Ether. This pattern is very distinct from that of two other cohorts covered by the report, as illustrated in the graphics below.

Both VIP and retail traders have been moving away from the leading crypto and putting their money into stablecoins. On the other hand, INS have been deploying stablecoin reserves for BTC and ETH in Q3 2023. Bybit&'s report notes that retail crypto traders have a history of decreasing their stablecoin investments during bull markets and increasing them during bear market or calm periods, which suggests risk aversion. Conversely, INS holders display good timing by changing stablecoins to leading crypto during a down market.

Traders from all three cohorts exhibit caution regarding altcoins, although retail investors experienced a sudden change of mood in July, increasing the altcoin share in their wallets by over 40%. Institutional investors consistently show little faith in altcoin performance with a clear downtrend – apart from a slight spike in July.