Bybit’s Institutional Report 2024 revealed a significant increase in monthly trading volumes across several centralized exchanges (CEXs) from October 2023 to March 2024.

During that timeframe, the crypto sector’s market cap surged from slightly above $1 trillion to over $2.5 trillion.

Bullish Trends and BTC as a Hedge

According to the report, OKXs trading volumes have soared by an impressive 278% since October of last year, with Binance following closely behind with a 239% increase.

Bybit Exchange emerged as one of the fastest-growing platforms, showing a remarkable 264% growth in trading volumes. Additionally, the U.S.-based exchange Coinbase experienced an uptick in volumes, rising by 193%, slightly below the industrys average growth rate of 255%.

The substantial growth in CEX volumes can be attributed primarily to BTCs price surges, which coincided with the approvals of spot Bitcoin ETFs in the U.S.

The reports findings reveal bullish trends in the derivatives market, particularly in Bitcoin (BTC) and Ethereum (ETH).

Despite sideways movements in March and April, investors displayed a bullish sentiment, as shown by the large call premium observed for both BTC and ETH futures contracts.

This trend suggests that investors are optimistic about the long-term price prospects of these two cryptocurrencies as the year progresses.

The report also highlights BTCs role as a hedge in traditional finance (TradFi) portfolios. BTC and ETH have correlations with traditional financial assets, such as stock indices and fixed income, that are consistently below 3%.

Allocating just 5% of a portfolio to BTC and ETH, equally weighted, can improve the risk-adjusted returns of the SP 500. This allocation can increase the Sharpe ratio from 2.20 to 3.15, representing a 43.6% improvement.

This effect is felt more when investors embrace higher risk and allocate more funds to cryptocurrencies.

Challenger Chains and VC Funding Resurgence

Challenger chains have also been doing well, with the native tokens of these platforms outperforming ETH since Q4 2023.

Solana (SOL), in particular, emerged as a top performer among these challenger tokens. It has maintained its momentum from 2021 as a challenger chain in terms of  Total Value Locked (TVL) and transaction volume.

The crypto industrys venture capital (VC) funding has also seen a resurgence. While Infrastructure projects are still the main focus of VC investments, the report reveals that investments have been made in various sectors, including gaming and AI projects.

In Q4 2023, venture capital deals rose by 21% to 174, with disclosed funding reaching $1.42 billion, marking a 29% increase. Q1 2024 saw 243 deals with disclosed funding totaling $1.94 billion, representing a further 36% increase compared to Q4 2023.