Retail Bitcoin Holdings Grow Slowly Amid Market Recovery

As bitcoin interest from major investors continues to rise, smaller market players are trailing behind.

A report from CryptoQuant indicates that the accumulation of bitcoin by retail investors is experiencing historically slow growth, despite this group slowly re-entering the market as BTC approaches the $70,000 mark.

Gradual Increase in Retail Investor Holdings

Over the last 30 days, retail bitcoin holdings have seen an increase of only 1,000 BTC. Since July 3, when this segment hit a local low, their total assets have escalated by 18,000 BTC. Currently, retail investors possess 1.753 million BTC, which is slightly below the 1.765 million peak recorded at the end of 2023.

Since May 2023, when retail holdings surged by 27,000 BTC, balances for these investors have been on the decline. Before this downturn, retail investors experienced substantial growth during several key moments: the market’s rebound in April 2020 following the COVID-19 crash, the peak of the previous bull cycle in April 2021, and the bear market of 2022 sparked by the FTX crypto exchange failure.

At present, larger bitcoin holders have outstripped retail investors. The assets of these larger entities have expanded more rapidly, with them accumulating an additional 173,000 BTC since the year’s beginning, while retail holdings have only increased by 30,000 BTC this year.

“During the 2022 bear market, retail investors experienced significant increases in their holdings, reaching a yearly growth rate of 347K Bitcoin,” CryptoQuant stated.

Declining BTC Transfer Activity

The sluggish growth among retail investors is also evident in their overall BTC transfer activity to exchanges, which has decreased from 2,700 BTC in the first half of 2023 to 2,000 BTC in the latter half, and now stands at 1,400 BTC in 2024. According to CryptoQuant, this suggests that retail investors are not aggressively selling their assets, reflecting their tepid BTC purchases.

Moreover, daily bitcoin transfers by retail investors have reached their lowest points. In mid-September, the volume of these transfers was $326 million, marking the lowest measure since 2020.

Interestingly, analysts have observed that low BTC transfer activity among retail investors often precedes price surges; therefore, the current situation for smaller bitcoin investors may indicate a positive sign.