As Bitcoin emerges as the top-performing asset in 2023, it has garnered endorsement from major Wall Street players such as BlackRock, who are actively working to integrate cryptocurrencies into the financial mainstream.
This indicates that the extended Crypto Winter has indeed come to an end, but it seems that retail participants are falling behind.
Retail Participation Lacking
Bitcoin’s recent price action to the upside helped it cross back into the top 10 largest assets by market capitalization. As BTC breached $800 million in market capitalization earlier this month, it surpassed the 10th slot and now sits behind other major assets, such as gold with around $14 trillion, silver at $1.5 trillion, and Apple at $3 trillion.
While this was reflective of Bitcoin’s growing relevancy and legitimacy as a global macro asset, retail traders appear to be on the sidelines. This is evidenced by Google search trends, which depicted a lackluster retail exuberance in the crypto market.
Upon gauging Google search trends for “Bitcoin,” Reflexivity Research observed that the market is still far from levels of euphoria and retail speculative activity that were previously reached during cyclical Bitcoin peaks.
A recent report also highlighted a notable absence of app downloads – a key element that characterized past bull markets. During the boom years of 2017 and 2021, consumer crypto apps, particularly Coinbase, dominated Apple’s App Store rankings as individuals eagerly sought to participate in the crypto action.
There has been a shift in the current scenario, despite the surge in Bitcoin prices, Coinbase has reportedly slipped to No. 318 overall and No. 21 among consumer finance apps, a significant decline from its previous No. 1 position.
Experts believe that as the crypto market continues to heat up, new participants, particularly retail investors, will join the fray, sparking the most substantial boom cycle yet. However, the absence of these metrics raises skepticism about this outlook.
The absence of retail customers in the current cycle could be attributed to people staying informed about the space over the past 18 months. The presence of figures like Sam Bankman-Fried, the FTX founder who was convicted of fraud and related crimes this year, might have dissuaded potential investors. The idea is that individuals, having followed the news, have decided to steer clear of an asset class associated with certain figures or events.
Another reason suggests that a considerable portion of the younger demographic, who are statistically more likely to own crypto compared to their parents, may already possess wallets from the previous bull cycle. In this scenario, platforms like Coinbase could be seeking new customers from a diminishing pool of individuals who are just starting to explore the world of crypto for the first time.
The argument here is that these newcomers might not be numerous enough to impact app download metrics significantly.
With the lack of a reliable indicator to monitor retail involvement in crypto, drawing meaningful conclusions requires a comprehensive dataset that goes beyond depending solely on metrics like Google Trends and rankings of downloads for crypto-related apps.
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