Ever since Bitcoin broke past the $20,000 mark for the second time recently, the talk has been how institutional interest and increased buying has been the reason for the massive spike in price that has sent BTC to highs of $61,000.
The likes of Microstrategy and even Tesla have been buying up Bitcoins in the billions leading some to suggest a supply crisis is looming and soon Bitcoin will be difficult for retail investors to get their hands on.
However, new research from JP Morgan suggests that it is actually the mass retail investors who are buying up the digital currency, especially following the awakening that came out of the WallStreetBets and GameStop saga.
Square and PayPal offering entry to the market
Part of the reason for the growth in Bitcoin interest is because payment institutions such as PayPal and Square have come to the party when it comes to offering cryptocurrency services and thus opened up a new retail investor market.
JPMorgan data suggests that retail investors have purchased more than 187,000 Bitcoin this quarter using PayPal and Square alone.Retail investors are even out-buying institutions, with JPMorgan’s analysts estimating institutions have purchased 173,000 BTC over the same period.
JP Morgan has analyzed fund flows from retail platforms and institutional vehicles such as the Chicago Mercantile Exchange, as well as announcements from large funds on BTC purchases to get to these findings.
Senior market analyst at Oanda Corp, Ed Moya, attributed the retail activity to social media, the current NFT craze, and stimulus payouts. He told Bloomberg:
“Now, with the Reddit-fueled meme stock craze cooling and novelties such as digital artwork setting records, retail traders — some now armed with $1,400 stimulus checks — are taking control.”
Feeding frenzy
While it may be surprising that retail investors, who have been personified as the active crowd that was spurred on by the WallStreetbets saga, are the ones leading the charge, it is actually closer to a 50/50 split.
Such a split is also a good thing for the cryptocurrency as it suggests that there is a general feeding frenzy across the different markets for cryptocurrency.
