Institutional players have returned to the crypto space in the past few weeks. However, it still lacks the support of retail investors in the crypto market as the majority of retail investors are still hesitant about new participation at this point.
After a brutal second quarter, Bitcoin, Ethereum, and several other cryptocurrencies have rallied significantly over the past 45 days. While BTC has staged a healthy 25% rally, digital assets like ETH and others have surged 80-100% in a short period of time.
The institutional push for crypto has partially played a game in the recent price rally. Over the past month, we’ve witnessed some notable developments, such as BlackRock’s partnership with crypto exchange Coinbase to offer its institutional clients access to bitcoin and crypto. Hedge fund giant Brevan Howard also raised more than $1 billion for a new crypto fund. In its most recent communication, BlockFi stated:
Bitcoin’s rally “can be attributed to recent optimistic headlines about continued institutional adoption of crypto.” Bitcoin’s rally “can be attributed to recent optimistic headlines about continued institutional adoption of crypto.”
BlackRock is the world’s largest wealth manager with more than $10 trillion in assets under management (AUM). BlackRock’s participation clearly shows that institutional demand for crypto remains positive.
Retail participation is missing in crypto
While the crypto market has rallied over the past 45 days, retail participation in crypto is currently lacking. It seems like retail players still have the wounds of the market crash going into the first half of 2022.
During its second-quarter earnings report last week, Coinbase said its key retail customers have been less active during the recent price rally. Speaking to Bloomberg, Marc Chandler, Chief Market Strategist at Bannockburn Global Forex said:
“That’s part of the problem – to be successful or continue to be successful I think it has to have more of a network effect. More people need to participate.”
Small bitcoin addresses with less than one BTC are on the rise. According to Glassnode, “This suggests that retail is participating, just not yet on a scale that would add momentum to the overall market.”
On the other hand, global macroeconomic conditions do not yet look favorable. Even though the inflation data is on the way down, it’s still pretty high for the Fed to initiate further rate hikes.
Bhushan is a FinTech enthusiast and has a keen sense of understanding the financial markets. His interest in economics and finance draws his attention to the emerging blockchain technology and cryptocurrency markets. He is constantly in a learning process and motivates himself by passing on the knowledge he has acquired. In his spare time he reads thriller fiction novels and sometimes explores his cooking skills.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication assumes no responsibility for your personal financial loss.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.