The Bitcoin community has been juggling multiple reports and speculation in the last few weeks, all concerning the accumulation of BTCs on Grayscale, a development that in the minds of many represents the rise of institutional investors. However, hypnotized by such developments, people tend to forget the market’s reliance on individual investors just a few months ago.

Source: ZUBR

Today, according to a recent ZUBR research report, retail investors in Bitcoin could play a huge role over the next 4 years, despite their shyness at the time of writing. The report states that in April 2020, addresses holding between 1,2,3 and 10 BTC exceeded 500,000, adding that this type of addresses has been on the rise since the start of the 2018 bear market.

Although the current supply of Bitcoin in circulation under these addresses remains minor (2.5%), the annual growth rate of these addresses has been constant (1 to 1.5%). In addition, the increase in the rate of BTC entities can be verified by the graph below.

Source: Glassnode

Source: Glassnode

As can be seen, unique Bitcoin addresses with a value of 1 BTC or less have steadily increased over the years. However, Bitcoin addresses less than or equal to 10 BTCs have appeared somewhat inconsistent, despite the maintenance of higher levels.

Is the Retail vs. Institutional case still relevant?

To understand what this question implies, we need to look at the year 2017. Bitcoin’s fall from its valuation peak of $20,000 is largely due to the presence of many retail investors. In December 2017, word of mouth was enough to attract a significant amount of retail investment, which inflated the price of the cryptocard by an exorbitant rate.

However, after the crash of 2018, institutional investors began to show interest. Affinities began to intensify and many people speculated that Bitcoin will record a higher position after April and May 2020 due to the involvement of institutional traders in the market.

Today’s ZUBR report indicates that retail could potentially account for 50% of physical supply by 2024. However, this is only possible if retail consumers continue to accumulate at the same rate. Historically, since 2017, a steady rate of accumulation has been noted, but once Bitcoin crosses the $20,000 mark and stays above it, addresses with 1 CTS could also experience a decline.

It is therefore difficult to estimate precisely the market share of individual and institutional traders in four years’ time, given that there is no fixation on interest and asset valuation.

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2020-07-01