Smaller investors are making a comeback in the crypto market, according to a recent report by Bloomberg. This resurgence comes as Bitcoin (BTC) has rallied 25% in the past month.
Positive Earnings Reports
Both Robinhood and Coinbase, popular retail trading apps, reported positive earnings last week. Coinbase saw a surge in revenue and users, and reported its first profitable quarter in two years.
Retail Involvement
While small investors are returning, their involvement is still far below the levels seen during the last bull market. Analyst Owen Lau of Oppenheimer & Co. estimates that retail volume is only at 16% of its previous peak.
Market Drivers
Experts believe that the upcoming Bitcoin halving in April, which will reduce miners’ rewards by half, could further boost retail engagement and growth.
Caution Advised
Trader Kyle Doane of Arca warns that while retail investors are returning, they should still exercise caution. Crypto stocks and miners remain more volatile than many tokens.
