Is It Still Early? Retail Interest in Crypto Continues to Lag

Rally Missing ‘Key Element’

Despite Bitcoin (BTC) going on a rally in the past seven days and gaining 16.55%, there are signs that something’s not right. Currently, BTC is trading at US $44,126 (AU $67,339) at the time of writing.

According to Barron’s, retail investors are not showing much interest in Bitcoin right now, despite increased interest in Coinbase shares. John Todaro, senior analyst at financial services company Needham said he believes retail interest is still subdued.

Retail crypto engagement is considerably lower than in prior years and despite the recent price gains, has been fairly muted. We have found that the best indicators for where crypto and Coinbase are in the cycle is based on a scale ranging from retail disinterest to euphoria. Today, retail interest is closer to disinterest.

John Todaro, Needham

The disinterest could of course be fallout from the FTX saga which recently saw its former CEO Sam Bankman-Fried being found guilty of fraud, facing a life in prison. Tadaro had pointed out in a CNBC interview in November 2022 that this will take some time to unravel.

Interest in Crypto Still Down

Google Trends shows that searches for ‘Bitcoin’ and ‘Cryptocurrency’ are still down from the heights of the previous bull market.

However, the lack of interest may mean that retail investors have not caught on to the recent developments in crypto. The absence of any meaningful retail investor trading could mean that most are not even aware that market conditions have improved, or that there is simply no interest in crypto at present.

Of course, one other, simple explanation is that with high inflation and interest rates people simply do not have spare cash to invest in crypto. After all, crypto is still one of the most volatile sectors to invest in. And let’s not forget that the last bull market was during a global pandemic when people had spare cash and time to invest.

Or, perhaps, too many got burned by the FTX and TerraLuna fiascos and opt to stay away from crypto altogether – at least for the time being. Whether retail will come back anytime soon or the next bull will be dominated by institutions is anybody’s guess. One thing is for sure though: it’s going to be a bumpy ride.