On September 15, 2022, the Ethereum network experienced a significant shift from the proof-of-work mining approach to the proof-of-stake model. This much-awaited shift has brought in a new era of sustainability and environmental friendliness in the blockchain industry, with an amazing 99.95% reduction in energy use. Ethereum has grown significantly in the last several months. As of the time of publication, its value has increased by 6.6% to $3,104. Each year, ETH has increased by 94%.
Ether has become the predominant asset among institutional holdings, with Bybit suggesting that this trend could be attributed to the anticipated positive impact of the Dencun upgrade, potentially leading to an upward trajectory.
Bybit Research Analysis of Ethereum
According to Bybit’s study, which questioned traders with assets in the exchange, institutions have boosted their portfolio concentration in bitcoin and ether to 80%, with a substantial bet on ether owing to the anticipated Dencun upgrade. The survey also stated that retail customers are more inclined toward cryptocurrencies and have less of a concentration in these assets.
With a 33% year-to-date advance, ether has beaten bitcoin, currently trading over $3100. Its deflationary supply since the switch to proof-of-stake, the low amounts of ETH kept on exchanges, and the rise in staking activity are some of the reasons behind this.
Gautam Chhugani and Mahika Sapra, analysts at Bernstein, highlighted in a recent report that the key reasons influencing Ethereum’s performance in relation to the largest digital asset globally were the growth of the DeFi ecosystem and layer-2 networks, as well as the anticipated Dencun update. In December, Bybit’s previous report revealed institutional bullishness towards bitcoin, mixed sentiment towards ether, and a trend of reallocating more ether and altcoin holdings into bitcoin in anticipation of the exchange-traded fund’s (ETF) approval.
This market sentiment indicates a change from that time. In spite of their strong returns in 2023, Bybit also reported a notable decline in institutional altcoin holdings, notably in erratic categories like meme coins, artificial intelligence (AI), and BRC-20 tokens. Instead, institutions are directing their focus towards stable assets like layer-1 tokens and decentralized finance (DeFi) protocols.