Matrixport Investment Research: Retail investor participation is decreasing, and BTC is increasingly dominated by institutional investors

The latest research from Matrixport Research Institute is as follows:

• The difficulty of exchanging fiat currency and crypto assets has increased, and retail investors interest in BTC has declined

• The market has low retail participation, and BTC is increasingly dominated by institutional investors

• South Korean retail trading group behavior may be correlated with the BTC price drop in the past 30 days

BTC Google search index drops, new traffic is less interested in BTC

Google Trends data shows that the market needs more attention from retail investors to BTC. During the BTC search index surge in 2017, the search trend reached 100%, dropped to 67% in 2021, and further dropped to 41% in March 2024. On the surface, this shows that retail investors have limited interest in BTC, but it does not rule out that as peoples understanding of BTC increases, the need to search for what is Bitcoin is decreasing. At the same time, retail investors face the challenge of converting fiat currency into cryptocurrency, which may have a profound impact on the crypto market.

The market has low retail participation, and BTC is increasingly dominated by institutional investors

While BTC has rebounded more than 300% from its lows at the end of 2022, retail participation remains low. Some argue that this is because we are still in the early stages of the market cycle, but gone are the days of wild swings in BTC with 5% gains or 10% losses due to retail leverage. Today the market is more stable, with minimal volatility on weekends as many traders follow institutions in buying and selling from Monday to Friday.

Even though BTC has experienced a 20% correction, its realized volatility has remained below the 5-year average (60%) and is currently only 41%. As retail participation decreases, BTC is increasingly dominated by institutional investors, leading to lower volatility. The liquidation of Korean retail positions when BTC fell below $60,000 further demonstrates this significant shift from retail to institutions. At the same time, ETFs continue to see steady inflows.

South Korean retail trading group behavior may be correlated with the BTC price drop in the past 30 days

When analyzing BTC’s performance in different time zones, it was found that most of BTC’s decline over the past 30 days occurred during the Asian trading hours, accounting for -13% of the overall decline of -15%. This trend may be influenced by the fact that South Korean retail trading groups dominate market activity during these time periods.

South Korea stands out in the analysis of retail activity. Trading volume on South Korean exchanges is closely correlated with BTC’s annualized funding rate, a key indicator of profitability in basis trading (spot and futures) and a signal of market movement. South Korean traders have played a key role in the rise of the altcoin market. Their interest in altcoins (partly due to the lack of futures markets for retail investors in South Korea) has led to a large number of leverage opportunities.

Some of the above views come from Matrix on Target. Contact us to obtain the full report of Matrix on Target.

Disclaimer: The market is risky and investment should be cautious. This article does not constitute investment advice. Digital asset trading can be extremely risky and unstable. Investment decisions should be made after carefully considering personal circumstances and consulting financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.