According to Bloomberg, on the American cryptocurrency exchange Coinbase, net income from transactions of retail investors in the fourth quarter of 2023 increased by 60% compared to the same period a year ago and by 80% compared to the third quarter.. Robinhood reported a 242% increase in cryptocurrency trading volume in December.
“There are noticeable signs that the retail audience is starting to return to the market, but not yet on the same scale as during the last bull cycle. This can be seen in the shares of cryptocurrency companies, which show greater volatility than many tokens,” said Arca trader Kyle Doane.
He also stated that retail investors are extremely important for the cryptocurrency market and crypto exchanges. Thus, during the last bull cycle, the bulk of Coinbase’s income came from retail traders.
However, it is still too early to talk about a large-scale return of retail investors. For example, trading volume for this category of Coinbase clients is still only 16% of what it was at the end of 2021, the peak period for the market. However, according to Oppenheimer & Co analyst Owen Lau, a lot of money is now being returned to clients from bankrupt companies, and a significant part of these funds may return to the cryptocurrency market.
“We definitely see several drivers for retail growth. In the past, halvings have been a significant factor in attracting retail customers,” said Coinbase CFO Alesia Haas.
Let us recall that over the past week, the capitalization of spot Bitcoin ETFs in the United States increased by $2.2 billion.