A tale of two strategies is emerging in crypto’s smart money circles. Ethereum maintains its institutional stronghold with $1.6 billion in SPAC backing, while simultaneously, nimble capital tests the waters with SOL’s comeback narrative and under-the-radar movers like SKY and BONK.
Summary
- Smart money is doubling down on ETH via derivatives and staking, driven by the $1.6B Ether Machine SPAC.
- Capital is rotating into SOL, UNI, ONDO, BONK, and SKY, reflecting renewed appetite for high-conviction altcoin narratives.
According to the latest Bybit Smart Money report shared with crypto.news on July 30, sophisticated investors are executing a dual-track strategy: deepening exposure to Ethereum (ETH) through derivatives and staking products while selectively rotating into altcoins with asymmetric upside potential.
The report highlights Ether’s dominance in institutional portfolios, buoyed by the impending Nasdaq listing of Ether Machine SPAC, a blank-check company holding $1.6 billion in ETH assets. Meanwhile, Solana’s (SOL) resurgence, fueled by growing optimism around a potential spot ETF, has positioned SOL as a hedge against ETH’s dominance, with smart money increasingly diversifying into high-conviction altcoin plays.
Smart money’s portfolio playbook
The Bybit report reveals a nuanced allocation strategy among institutional players, where conviction holdings coexist with tactical rotations. Ethereum remains the cornerstone, with derivatives, particularly Liquid Collective’s staked ETH, dominating smart money portfolios.
This preference underscores ETH’s dual role as both a yield-generating asset (via staking) and a liquid DeFi primitive. Meanwhile, Bitcoin derivatives persist near the $120,000 threshold, reflecting a “digital gold” mentality where investors hold despite sideways price action.
Amid the reshuffle, Ondo Finance has emerged as a dark horse, capitalizing on the real-world asset tokenization wave. Its infrastructure, which tokenizes U.S. Treasuries and other yield-bearing assets, bridges TradFi and DeFi, a narrative resonating with funds seeking tangible utility. The report notes ONDO’s inclusion in top smart money holdings, suggesting institutional players view RWAs as more than a passing trend but a foundational shift in crypto’s value proposition.
At the same time, Uniswap has gained 50% in a month with little fanfare, a telltale sign of smart money accumulation, per the report. The lack of major announcements hints at potential unspoken catalysts, such as governance upgrades or fee-sharing mechanisms. The same applies to Worldcoin, which Bybit noted is benefiting from regulatory clarity around decentralized identity in the U.S., positioning it as a compliance-friendly play for institutions hedging bets on web3’s identity layer.
Trading flows
According to the Bybit report, Solana’s derivatives activity has surged, with traders pivoting from ETH to SOL ahead of potential ETF approvals. This mirrors Ethereum’s pre-ETF accumulation pattern in early 2023, suggesting a calculated bet on regulatory momentum.
Meanwhile, meme coins are undergoing a generational shift: capital is migrating from legacy tokens like DOGE to newer entrants (for example Bonk and Pengu), indicating smart money’s appetite for fresher, more volatile narratives.
Avalanche ells a cautionary tale, with outflows signaling profit-taking after months of muted performance. In contrast, Sky is attracting inflows, likely due to its expanded exchange listings and Spark Protocol’s growing adoption.