The latest research from the ZUBR derivatives exchange published on 29 June showed that retail investor participation is increasing despite the longstanding argument that institutional adoption would be necessary to propel crypto prices upwards

With the recent halving being a distant memory and the price of Bitcoin (BTC) remaining at around $9,100, the current price trend is far from the post- halving increase that many retail and institutional investors have been expecting

Despite the low prices, a multitude of bullish factors such as the record growth in the number of Bitcoin, a new absolute record in the number of portfolio addresses containing less than one BTC, a record exit of BTCs from the stock exchanges, and the fact that Bitcoin recently achieved its third best quarterly performance ever show a remarkable growth in investor participation with the highest ranked digital asset

In addition, the growing demand for Bitcoin from Grayscale Investments, Square and other companies suggests that demand is coming from both institutional and retail investors

Total number of BTCs held in specific number of addresses (1-10 BTCs). Source: Chainalysis

Meanwhile, based on Chainalysis data, ZUBR observed that in April 2020, portfolio addresses containing 1 to 10 bitcoin had exceeded 500,000 and that “these addresses have increased every month since the start of the 2018 bear market after the price of bitcoin peaked”

According to the ZUBR

“By the next reward era in 2024, retail could potentially account for over 50% of the physical supply.”

In 2020, there has been much discussion about the perceived correlation between equity markets and Bitcoins. When the markets collapsed in March 2020, risky assets such as Bitcoin quickly followed suit

Typically, a sharp decline in value, such as the 50% drop in bitcoin prices that occurred on March 13, dampens demand in tandem with the downturn in equity markets. But ZUBR data shows the opposite

Even though the price of Bitcoin fell more than 50% on Black Thursday, demand from retail investors remained strong and there was no noticeable decrease in the amount of Bitcoin held in portfolio addresses associated with retail investors.

Month-on-month BTC increase/decrease in precise addresses (1-10)

Monthly increase/decrease of BTC in specific addresses (1-10). Source: Chainalysis

Currently, 900 bitcoins are extracted every day and this figure is expected to fall to 450 by the next halving in 2024. ZUBR predicts that by 2024, the halving of retail demand could exceed an average of 250 BTC per day or half of the new daily supply available

Bitcoin retail demand estimates versus supply

Estimates of Bitcoin’s retail demand versus supply. Source: Chain Analysis, ZUBR

Furthermore, this retail demand figure may actually exceed ZUBR’s estimate because their data only includes portfolio addresses with whole numbers instead of accounts with split BTC holdings

Although it is difficult to predict the future evolution of Bitcoin prices, it is clear that retail investors are not being driven out of the sector by the influx of institutional funds

If ZUBR and Chainalysis’ predictions come true, small investors will in fact play a more important role in the dynamics of the network and the value of Bitcoin by 2024.


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