Market downturn pushes crypto traders toward broader asset diversification: Executive
Johann Kerbrat, who leads Robinhood's cryptocurrency division, observed that digital asset investors are seeking additional opportunities to engage with crypto markets rather than simply holding tokens during ongoing market volatility.
Digital asset investors are expanding their portfolios beyond the three dominant cryptocurrencies as the ongoing market correction persists, according to Johann Kerbrat, who serves as Robinhood's crypto division head.
"I think what we see from our customers is that they actually see it as an opportunity," Kerbrat told Cointelegraph during an exclusive interview, adding that they are seeing it as "an opportunity to buy the dip."
"So we actually see a lot of customers continuing to trade crypto and diversifying, not just on the top two or three assets, but actually going pretty wide," he said, referring to the largest two cryptocurrencies by market capitalization, Bitcoin (BTC) and Ether (ETH).
This trend suggests that market participants may be growing increasingly comfortable with cryptocurrency as an investment category, accepting both its volatility and cyclical price movements.
Investors have a "very clear view" on Bitcoin and Ethereum
This development emerges just a few months following statements from Anthony Bassili, president of Coinbase Asset Management, who shared with Cointelegraph in November that typical investors have yet to form a definitive consensus regarding which third cryptocurrency beyond the leading two deserves significant consideration.
"The market is very unsure as to what's the next asset they want to own after that," he said, adding that Solana (SOL) is "maybe" the third asset on the radar. Bassili said at the time that there is a "very, very clear view" in the community in terms of Bitcoin being the first priority, followed by Ethereum.
Basil Al Askari, who serves as CEO of institutional cryptocurrency asset trading platform MidChains, informed Cointelegraph that "we're seeing full-scale asset managers entering with very large block trades going into predominantly the top 20 assets."
"Not necessarily smaller cap altcoins, or not necessarily into DeFi or yield products," Al Askari said, adding, "it's baby steps."
"I don't think it's impossible to see large investment managers and funds build specific teams around strategies that do different things along the risk curve, and so I do think that's very possible," Al Askari said.
Crypto holders are looking for use cases
In the meantime, Kerbrat indicated he's also observing an increase in cryptocurrency holders on the platform who are actively utilizing their tokens rather than merely holding them.
According to Kerbrat, staking has experienced "very strong traction" since Robinhood introduced the feature in December, and an increasing number of crypto holders are now exploring decentralized finance (DeFi) despite the market uncertainty.
"It's been pretty fun to see, to be honest. It's always surprising," Kerbrat said.
This trend emerges as broader cryptocurrency market sentiment has deteriorated, with the Crypto Fear & Greed Index remaining in "Extreme Fear" since the start of February.
Meanwhile, US spot Bitcoin exchange-traded funds (ETFs) have posted five consecutive weeks of net outflows, with investors pulling roughly $3.8 billion from the products over the period.