According to a report by Cryptoquant, the recent Bitcoin price surge in early 2024 has led to discussions of retail investors re-entering the cryptocurrency market.
Smaller Bitcoin addresses tell a different, nuanced story, while more prominent players grab all the headlines. Looking at these groups, they increase retail participation in a gradual, if sometimes uneven, way this cycle.
Global Economy Slows New Bitcoin Investments
The most notable trend is the growth of plankton addresses with balances of more than 0 and up to 0.1 BTC. But at a much slower rate than in previous cycles, the number of these addresses has increased.
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The new investor’s approach slowly is due to a cautious approach afforded by the global economic challenges.
Bitcoin’s value has gone up overall, but there’s a reason that retail investors don’t seem as eager to pull the trigger. The tighter monetary conditions in the global financial environment could explain this trend. This has meant a less dramatic plankton address surge during this bull market than before.
Retail Bitcoin Growth Slows in Volatility
From the beginning of 2024, the growth of shrimp addresses holding between 0.1 and 1 BTC has been moderate. However, this increase is less regular than in previous cycles, with some decreases during market volatility.
Mid-level retailers still appear to hold a guarded sentiment, and crab addresses, holding back 1 to 10 BTC, have more stability.
There’s more evidence of uneven retail investor growth in these smaller address categories, although the engagement is significantly more uncertain.
Those increased addresses are likely due to renewed interest from mid-level investors. However, this growth is weaker than we’d hoped, possibly because of economic uncertainty and cautious investment behavior.
BTC Trading Volume Indicates Market Strength
Corporate retail investment is likely limited by global monetary conditions tightened over the past few years. However, the increase in these smaller categories that have yet to reach the final wave of retail FOMO-driven FOMO still shows room for a final retail wave yet to come.
If global financial conditions improve, retail investors could feel comfortable increasing their Bitcoin exposure again.
The market tells us that while retail participation is up, it is far from the participation we saw in previous bull runs. Based on investor sentiment, another surge is possible, but external factors lead to that potential.
Currently, the BTC price is trading in bullish sentiment, with Bitcoin exchanging hands at $65,221.83, a price increase of 4.18%, according to CoinMarketCap data.
Moreover, the increase in BTC trading volume, which has recorded a rise of 111.19%, strengthens the bullish sentiment, suggesting that the current bullish sentiment might continue in the hours ahead.
