Here’s What it Means According to CryptoQuant

While bitcoin demand among large investors is picking up as time passes, smaller market players are lagging.

According to a CryptoQuant report, the holdings of retail bitcoin investors are growing at a historically slow pace, even as this cohort of players gradually returns to the market amid BTC’s ascent to the $70,000 level.

Retail Investor Holdings Slowly Growing

In the past 30 days, retail bitcoin holdings have increased by just 1,000 BTC. The total assets by this group of market participants have also risen by 18,000 BTC since July 3, when it recorded a local bottom. At the time of writing, retail investors held 1.753 million BTC, slightly lower than the 1.765 million record at the end of 2023.

Since May 2023, when retail holdings grew by 27,000, the balances of these investors have been reducing. Before this period of declining holdings, retail investors saw moments of high growth: market recovery in April 2020 after the COVID-19 crash, the previous bull cycle top in April 2021, and the 2022 bear market following the crash of the bankrupt crypto exchange FTX.

Currently, larger bitcoin investors have outpaced retail players. The holdings of larger entities are growing at a faster pace than retail investors, with the former adding 173,000 BTC to their stash since the start of the year. On the other hand, the latter have grown their holdings by just 30,000 BTC year-to-date.

“Retail investors saw their holdings increase significantly in the bear market of 2022, when they peaked at a yearly growth rate of 347K Bitcoin,” noted CryptoQuant.

Low BTC Transfer Activity

The slow growth among retail investors can also be seen in their overall BTC transfer activity to exchanges, which has plunged from 2,700 BTC in the first half of 2023 to 2,000 BTC in the second half and now 1,400 BTC in 2024. CryptoQuant says this indicates that retail investors have not been selling their assets aggressively, mirroring their weak BTC purchases.

Additionally, daily bitcoin transfers by retail investors are at their lowest levels. The volume of these transfers was $326 million in mid-September, the lowest level seen since 2020.

Interestingly, analysts said historical data shows low BTC transfer activity among retail investors preceding price rallies; hence, the current state of smaller bitcoin investors could be a positive signal.