Bitcoin Transfer Activity Among Retail Investors Remains Low: CryptoQuant

Bitcoin CryptoQuant

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Tanzeel Akhtar

Journalist

Tanzeel Akhtar

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Tanzeel Akhtar has been covering the cryptocurrency and blockchain sector since 2015. She has written for the Wall Street Journal, Bloomberg, CoinDesk, Bitcoin Magazine and Bitcoin.com.

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October 24, 2024

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As Bitcoin edges closer to its previous all-time high, retail investors are slowly making their way back into the market but transfer activity remains low, according to data analytics firm CryptoQuant.

Since the cryptocurrency’s last local bottom on July 3, 2023, retail investors—those holding less than 1 Bitcoin—have added 18,000 Bitcoin to their portfolios, bringing their collective total to 1.753 million Bitcoin.

This uptick signals a tentative reentry of smaller investors, buoyed by the bullish sentiment surrounding Bitcoin’s price momentum, reports CryptoQuant.

It seems Bitcoin could be in for a bull run. Bitwise’s head of alpha strategies, Jeff Park, has predicted that Bitcoin could soar to $92,000 if Donald Trump wins the 2024 U.S. presidential election, as reported by Ruholamin Haqshanas at CryptoNews.

Growth in Retail Holdings Remains Sluggish

However, despite this increase, the growth in retail holdings remains sluggish by historical standards. Over the past 30 days, retail holdings have risen by a mere 1,000 Bitcoin, a notably slow pace when compared to earlier periods, reports CryptoQuant.

The growth rate for retail investors’ Bitcoin holdings has been in a downward trend since May 2023, when retail accumulations reached as high as 27,000 Bitcoin. This marked deceleration suggests that while retail investors are reentering the market, they are doing so with caution.

In contrast, larger Bitcoin investors, particularly those holding between 1 and 10,000 Bitcoin, have been far more aggressive in accumulating the digital asset in 2024.

Data from the year shows that since the beginning of the year, retail investors have increased their holdings by 30,000 Bitcoin, while larger investors have expanded their portfolios by a significantly higher 173,000 Bitcoin. This disparity highlights a shift in market dynamics, with institutional or high-net-worth investors driving much of the current demand for Bitcoin.

Adding to the cautious behavior of retail investors, Bitcoin transfer activity among this group has remained at relatively low levels. On September 21, 2024, the daily transfer of Bitcoin by retail investors in USD terms dropped to $326 million, the lowest since at least 2020.

Historically, such low transfer activity among retail participants often precedes significant price rallies for Bitcoin, as seen in previous bull markets.

Overall, while retail investors are reentering the market, their slower pace of accumulation and reduced transfer activity suggest a more cautious approach compared to larger players, reports CryptoQuant.

The return of retail investors, although modest, could still play a pivotal role in the next Bitcoin rally, especially as the market nears previous highs and larger investors continue to exert upward pressure on the price.