Coinbase Soars as Bitcoin Rally Fails to Ignite Retail Frenzy

There’s a surprising surge happening in Bitcoin, and what makes it stand out is the unexpected absence of the usual hero—the retail investor. Normally the driving force behind crypto rallies, U.S. retail investors are surprisingly indifferent this time, making this rally different from what we’ve seen before.

What’s the reason behind this change and is it a cause of concern? Read on to find out.

Coinbase Continues to Shine!

Retail investors have been a big deal in past crypto surges, especially on platforms like Coinbase Global. But as Bitcoin makes a comeback, U.S. retail investors aren’t as excited. Interestingly, despite this lack of interest, Coinbase’s shares have shot up by 3% in early trading, a whopping 312% increase this year alone. This surge cements Coinbase’s position as a powerhouse in the U.S. crypto market.

Also Read: Coinbase and Bybit Taking Major Market Share After Binance’s $4.3 Billion Settlement

Cracking the Code: Coinbase vs. Bitcoin

While Coinbase is doing well, Bitcoin itself isn’t grabbing the same attention from U.S. retail investors. Trading volumes and overall interest in Bitcoin remain low, indicating a gap between Coinbase’s success and Bitcoin’s appeal to everyday investors.

John Todaro, an analyst from Needham, points out a noticeable drop in retail crypto engagement compared to previous years. Despite price gains, the excitement is surprisingly low. Retail interest, usually a big deal for the crypto market, currently seems more like disinterest than excitement.

All Hope Isn’t Lost!

There’s still hope in the crypto community that the rising prices of Bitcoin might get retail investors interested again, possibly boosting trading volumes and brokerage revenues. Wall Street analysts are cautiously hopeful, with Needham raising Coinbase’s stock price target. Even skeptics like Dan Dolev from Mizuho Securities are showing a bit of a change in attitude.

This shift recognizes Bitcoin’s impact on related stocks like Coinbase.

They’re Crucial to the Game…But Will They Return?

The fate of Bitcoin’s current rally seems to depend on retail investors. Whether they join in or stay on the sidelines could decide the fate of this surge. As we navigate through a phase similar to late 2019, with smaller rallies and corrections, there’s anticipation for the next big upswing, likely around 2025 based on historical trends. So, 2023 becomes a preparation period for the next major cycle in crypto.

Read More: Spot Bitcoin ETF Approval Looms, But is the SEC’s Approach Correct?

The big question is whether retail investors will jump back into the crypto scene and fuel the next phase of this rally. As Bitcoin continues its unpredictable journey, the crypto market is watching and waiting, thinking about how the role of the retail investor is changing.

The stakes are high, and the next move in this dance between retail sentiment and crypto dynamics is uncertain but eagerly awaited.