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Why are individual investors hesitant about the crypto market despite the apparent institutional support?

Why are individual investors hesitant about the crypto market despite the apparent institutional support?

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Answer Why are individual investors hesitant about the crypto market despite the apparent institutional support?

Over the past few weeks, institutional investors have returned to the cryptocurrency space.

However, the support of individual investors in the cryptocurrency market is still missing as most of them are still hesitant about the new participation at this stage.

After a tough second quarter, the prices of Bitcoin, Ethereum, and many other cryptocurrencies have skyrocketed over the past 45 days.

While Bitcoin gave a healthy 25% rally, altcoins like Ethereum and others rose 80-100% in a short period of time.

The institutional push for cryptocurrencies played a part in the recent price hike.

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Over the past month, we’ve seen some major developments such as BlackRock’s partnership with Coinbase to provide institutional clients with exposure to Bitcoin and cryptocurrencies.

BlackRock is the world’s largest asset manager with over $10 trillion in assets under management.

BlackRock’s post clearly shows that institutional demand for cryptocurrencies remains.

One of the hedge fund giants, Brevan Howard, has also raised more than $1 billion to create a new crypto fund.

The crypto market lacks the participation of individual investors:

While the cryptocurrency market has bounced back in the last 45 days, the participation of individual investors in cryptocurrency is still missing at this point.

It seems that retail investors are still suffering from the wounds of the market crash during the first half of 2022.

During last week’s second-quarter earnings report, Coinbase said retail investors have been less active during the recent price rally.

Speaking to Bloomberg, Mark Chandler, chief market strategist at Bannockburn Global Forex, said:

This is part of the problem, in order to succeed or achieve more success.

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I think the crypto market should have a greater impact so that more people participate in it.

It is worth noting that small bitcoin addresses, which hold less than one bitcoin, have been on the rise.

According to Glassnode:

This indicator indicates that retail investors are participating, but not on the scale that would add more momentum to the market as a whole.

On the other hand, global macroeconomic conditions remain unfavorable so far.

Although the inflation data is coming down, the number is still too high for the Fed to start raising interest rates in the future.

Read also:

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