Matrixport Research: Retail Participation Decreases, BTC is Increasingly Dominated by Institutional Investors
In the past 30 days, most of the BTC price decline occurred during the Asian trading session, accounting for -13% of the overall drop of -15%.Matrixport Research Institute's latest findings are as follows:
The difficulty of exchanging fiat currency for crypto assets has increased, and retail interest in BTC is declining.
Retail participation in the market is low, with BTC increasingly dominated by institutional investors.
The behavior of retail trading groups in South Korea may be correlated with the recent 30-day decline in BTC prices.
The Google search index for BTC is declining, and new traffic interest in BTC is decreasing.
Google Trends data indicates that the market needs more retail attention on BTC. The BTC search index soared to 100% during the spike in 2017, dropped to 67% in 2021, and further declined to 41% in March 2024. On the surface, this suggests limited retail interest in BTC, but it does not rule out the possibility that as people's understanding of BTC increases, the necessity to search "What is Bitcoin" is decreasing. At the same time, retail investors face challenges in converting fiat currency to cryptocurrency, which may have profound implications for the crypto market.
Low retail participation in the market, with BTC increasingly dominated by institutional investors.
Although BTC has rebounded over 300% from its low point at the end of 2022, retail participation remains sluggish. Some believe this is because we are still in the early stages of the market cycle, but the days of BTC experiencing extreme volatility due to retail leverage—5% increases or 10% decreases—are long gone. The market is now more stable, with weekend volatility at its lowest, as many traders follow institutional buying and selling from Monday to Friday.
Even with a 20% correction in BTC, its actual volatility has consistently remained below the 5-year average (60%), currently at only 41%. As retail participation decreases, BTC is increasingly dominated by institutional investors, leading to a decline in volatility. When BTC fell below $60,000, the liquidation of South Korean retail investors further demonstrated this significant shift from retail to institutional. Meanwhile, ETFs continue to see stable inflows.
The behavior of retail trading groups in South Korea may be correlated with the recent 30-day decline in BTC prices.
Analysis of BTC performance across different time zones reveals that in the past 30 days, most of the BTC declines occurred during Asian trading hours, accounting for -13% of the overall -15% decline. This trend may be influenced by the dominance of South Korean retail trading groups in market activities during these time periods.
In the analysis of retail activity, South Korea stands out. The trading volume on South Korean exchanges is closely related to the annualized funding rate of BTC, which is a key indicator for basis trading (spot vs. futures) profitability and market direction signals. South Korean trading users have played a key role in the rise of altcoins. Their interest in altcoins (partly due to the lack of a futures market for retail investors in South Korea) has created numerous leveraged opportunities.
Disclaimer: The market carries risks, and investment should be approached with caution. This article does not constitute investment advice. Trading digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided herein.
