First Mover: The Return of the Bitcoin Retail Investor (And Why Thats a Good Thing)

Monday 29 June 2020, 11:06 PM AEST - 4 months ago

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Since the end of 2017, the assumed trajectory was that well-heeled financial institutions would take the reins from retail investors, becoming the main driving force and primary investor class in crypto.

But a report out last week from derivatives exchange ZUBR argues that retail investors are not just here to stay, they could end up absorbing more than half of bitcoins daily fresh supply in as little as four years.

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By the time the next reward [halving] era comes around in 2024, retail could potentially account for eating up over 50% of the physical supply, the report predicts.

Using data from analytics firm Chainalysis, ZUBR found that the number of wallet accounts holding small whole balances, anywhere between 1 to 10 bitcoins – sizes that suggest retail rather than institutional – had risen rapidly.

Since bitcoin hit its all-time high at the end of 2017, the number of retail wallet holders more than doubled, reaching 215,000 by the start of June 2020.

In total, these entities hold over 500,000 bitcoin (~$4.6 billion), up over 100,000 since the start of 2019.

nl-1-2Source: Chainalysis via Zubr Research

​​​​​​On average, 144 bitcoin blocks are mined every day. After the next halving in 2024, about 450 bitcoin will enter circulation each day. Assuming demand continues at its present trajectory over the next four years, ZUBR estimates that the amount of new bitcoins demanded daily by retail investors could be at around 250 – well over half the daily supply four years from now.

And t ...

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