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Retail Investor Lead Institutions In Bitcoin Purchase: JPMorgan Chase


A new report by JPMorgan Chase indicates that retail traders bought more Bitcoin than institutions in the last quarter. Despite raised interest in Bitcoin by institutions, retail traders continue to lead in Bitcoin purchase.

The bank revealed that retail traders bought around 187,000 Bitcoins in the last quarter. At the same time, institutions accumulated 173,000 Bitcoins. JPMorgan Chase followed retail purchase from retail platforms such as Square and Paypal. On the other hand, Institutional data came from retail platforms to institutional vehicles transfers as well as announcements by institutions.

The high demand from retailers can be attributed to FOMO (Fear of Missing Out). Since Bitcoin broke above $20,000, the digital asset has been on price discovery and most buyers are trying to catch the next top.

As for institutional interest, Bitcoin’s attribute as a hedge fund has attracted them. Companies like Tesla, Square and Twitter sought Bitcoin to diversify their portfolio. For both, their bet on Bitcoin has paid off. Since the turn of the year, Bitcoin has doubled, climbing from just under $30K to a recent high of $60K.

Institutions vs Retail Traders

Arguably, with the stimulus checks coming, more retail traders will buy Bitcoin. As we reported, about $40 billion of the stimulus cash is set to flow into the stock market and Bitcoin. And 60% of those who plan to invest their checks prefer buying Bitcoin to stocks. Platforms offering crypto-friendly options are also on the rise. Already, Square and Paypal are making it easy to access crypto but competition is on the rise with Visa also set to offer an option to buy crypto. Mastercard in February also announced plans to support cryptocurrencies before the end of the year.

In contrast, a Glassnode chart has revealed that the number of institutions holding 1,000 Bitcoins or more has dropped. According to Lex Morkovski who shared the chart, here are three possible reasons for the plunge. These are- split into large addresses, some addresses getting below 1,000 BTC and whales selling.

Although retailers holding more is a big deal for the ecosystem, institutional interest remains a major factor. For starters, they offer price stability as they are less prone to panic selling. They also play a role in price growth in relation to demand. It has further been argued that the entry of institutions will help bring regulation in the industry as well as the potential for a Bitcoin ETF.

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