Small Investors Start Making a Cautious Return to Crypto

As the crypto market shows signs of recovery, smaller investors, often referred to as “mom-and-pop” investors, are making a cautious return to platforms like Robinhood and Coinbase, energized by Bitcoin’s 25% rally over the past month once again claiming a market cap of over $1 trillion. This shows a tentative step towards re-engagement with the cryptocurrency world, as observed in a recent Bloomberg report.

We are only at 16% of the last peak retail volume.

Despite this uptick in activity, the involvement of these smaller retail investors hasn’t reached the heights seen during the last bull market. This cautious re-entry into the market is underscored by the latest financial reports from Robinhood and Coinbase, both of which have posted positive outcomes. Coinbase, in particular, reported a significant increase in revenue and user numbers, marking its first profitable quarter in two years—a development that dramatically boosted its stock value.

Kyle Doane, a trader with Arca, shared insights with Bloomberg, noting, “There are signs that the retail audience is starting to get back into the market, but not nearly to the extent of the last bull market yet… Even crypto stocks like COIN and miners are exhibiting more volatility than many tokens.” This statement highlights the gradual but noticeable return of retail investors to the crypto space, albeit with more caution than in previous surges of interest.

Adding to the conversation, Owen Lau, an analyst at Oppenheimer & Co., pointed out, “We are only at 16% of the last peak retail volume. With the money returning from the bankrupt entities, there is a lot of room to run potentially.” This observation suggests a significant potential for growth in retail participation in the crypto market.

Furthermore, Coinbase CFO Alesia Haas commented on the situation, telling Bloomberg about the positive “momentum drivers” the firm has observed. She highlighted the upcoming Bitcoin halving event in April, which will reduce the rewards for miners by half. Historically, such events have led to increased retail engagement and growth, suggesting a possible uptick in investor activity in the near future.