After a shiny 2021, this year has been really tough for all the retail players in the crypto market. The crypto market has undergone several cycles of correction and much recently during the last month.
In just the last 45 days, the crypto market has eroded more than $800 billion worth of investors’ wealth. However, Coinbase data shows that the mass exodus of retail players from the crypto market started itself during Q1 2022.
Citing data released by crypto exchange Coinbase last week, CryptoQuant CEO Ki Young Ju states: “76% of the trading volume at @Coinbase came from institutional investors in Q1 2022″. He further added:
“Retail investors are leaving the crypto market. Not bad for accumulating Bitcoin with institutions, but still worried about overall volume which is significantly decreased compared to last year”.
76% of the trading volume at @Coinbase came from institutional investors in Q1 2022.
Source: Coinbase shareholder letter (May 10, 2022) pic.twitter.com/HuRt91nApEadvertisement
— Ki Young Ju (@ki_young_ju) May 18, 2022
There’s no doubt that the recent market correction has shaken retail and institutional players alike. At the same time, retail players have recently lost a ton of money with the collapse of the Terra ecosystem last week.
Furthermore, the Bitcoin fear and greed index shows that we are currently in the extreme fear zone. However, this could prove to be the right time for long-term accumulation.
Inflows Return to Bitcoin Funds
On Monday, May 16, CoinShares published a report stating that institutions poured $300 million into Bitcoin funds last week despite the heavy market correction. A majority of these funds came from the North American institutions while the European institutions recorded net outflows. The report states:
“A strong signal that investors saw the recent UST stable coin de-peg and its associated broad sell-off as a buying opportunity. Bitcoin was the primary benefactor, with inflows totalling US$299m last week, suggesting investors were flocking to the relative safety of the largest digital asset”.
On the other hand, institutions decided to withdraw large sums from altcoins which have tanked significantly.