Retail Traders Levelling the Bitcoin Playing Field: JP Morgan

According to research by strategists at leading U.S. financial investment bank, JP Morgan Chase, Bitcoin (BTC) retail investors have out bought institutions this quarter (Q1 2021), picking up the slack and helping drive the price of Bitcoin to $61,000.

The decline in institutional buying may be one of the reasons the price didn’t hold, as well news about India’s policy regarding cryptocurrencies which is said to have hit the token hard.

Increased Interest From Retail Traders

According to Chainalysis, in 2017, the majority of Bitcoin buyers were retail investors purchasing the cryptocurrency using personal funds. However, 2020 saw a change as mainstream companies and financial institutions were buying up most of the Bitcoin due to macroeconomic uncertainty.

As seen in the breakdown below retailers bought more BTC in Q3 2020 and Q1 2021 than Wall Street buyers. According to the data, itBit daily volumes (which the bank uses as a proxy for PayPal) nearly doubled between Q4 2020 and Q1 2021. Meanwhile, bitcoin payments facilitated by Square also doubled.

Table shows a breakdown of bitcoin flows since 3Q 2020.
Source: JPMorgan

Bitcoin’s latest rally meant that it is up by 100% since the start of the year and more than 500% over the past six months. The indicator for CME Group only inched up slightly from 1,284 to 1,449.

Growing Interest in Bitcoin

BTC Net Growth: glassnode

Now, with the Reddit-fueled meme stock craze cooling and novelties such as digital artwork setting records, retail traders — some now armed with $1,400 stimulus checks — are taking control.

Senior market analyst at Oanda Corp, Ed Moya

Brian Vendig, president of MJP Wealth Advisors, stated that retail need has actually been driven by fear of losing out (FOMO) following the current wave of institutional financial investment into Bitcoin.

More Opportunities for People to Learn, Own, and Transact with Crypto

As reported by Reuters Bitcoin ATMs have been increasing in numbers across the U.S. and Bitcoin’s growing popularity has been a major driver for these new installations (more than 10,000 in the last five months).

Source: Piqsels

The influx of retail buyers might be due to increased exposure through social media, celebrities championing crypto related technologies, NFTs, and simpler technologies that facilitate the acquisition of crypto. When individuals are well-informed they are more likely to participate.


Crypto News Guest Authors

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