By Medha Singh
BENGALURU-What’s happened to the army of retail traders who used to drive bitcoin’s biggest rallies?
US crypto exchange Coinbase reported just $56 billion in consumer trading volumes in the first quarter of 2024, when bitcoin leapt to record heights close to $74,000.
While that represents a fledgling recovery in retail interest – almost double the level in the final quarter of last year – it’s way below the $133.75 billion quarterly average during the last comparable rally in 2021.
The retail investor was in the driving seat of that wild 2021 ride, as COVID lockdowns, cheap money and personal savings drove up prices of “meme” stocks and spawned bouts of intense FOMO, or fear of missing out. By contrast, the latest rally was a more solemn, institutional affair propelled by the birth of US bitcoin exchange-traded funds.
“It’s the million-dollar question in crypto right now – when will retail traders come back?” said Michael Rinko, analyst at Delphi Digital.
In another sign of the retail retreat, Google trends data shows search interest in the term “bitcoin” in March was only half of the peak in 2021.
Some small-time investors are still nursing the chills of the more than two-year long crypto winter, when bitcoin stayed limp at levels between $20,000 to $30,000.
