Institutional Investors vs Retail Investors

• Investors’ interest has risen rapidly in the adoption of Bitcoin and the cryptocurrency market over the past few years.
• While Institutional Investors are on the rise Retail Investors remain the backbone of the cryptocurrency market.

Current investors are joining institutions to invest in bitcoin and other cryptocurrencies due to its efficiency in bringing in fresh money, more than what retail investing can generate.

An Institutional investor is an organization/company that invests in Bitcoin or any other cryptocurrency on behalf of its clients while a retail investor is an individual who is interested in the aspects and features of crypto this includes;

Hedges against inflation: Cryptocurrencies are not correlated with the traditional financial system. In fact, when the traditional market is falling, cryptocurrencies rise acting the same way as gold.

Investment option: Like most assets, cryptocurrency generally adds value with time.

Financial privacy: The ability to use ‘Pseudonyms’ enables investors to keep their identities private when transacting crypto business.

In retail investors, Classification is categorized under the amount of cryptocurrency each holds.
Whales: These are investors who have extensive holdings of cryptocurrency. They have a major influence on the crypto market and mostly the price by their power to sell or buy. These anonymous individuals are kept private due to the ability to offer their own titles in pseudonyms and must accumulate/ own more than 1000 BTC. Crypto whales include such as Gemini, A crypto exchange Cameron and Tyler Winklevoss hold over 78000 BTC, and Tim Draper, an American venture capitalist, with 29,656 BTC

Hodlers: This is when an investor buys and holds crypto in the hope of the coin rising in the near future through its price fluctuations and volatility.

Speculators: These are individuals that do take time doing research, and thinking so to develop a plan on which crypto to invest in. They undergo the fear of missing out (FOMO)

Biggest Institutional Investors

MicroStrategy, the biggest Bitcoin owner with 129,699 Bitcoins, and Blackrock with $400 million invested in bitcoin mining companies, Both institutions have invested in crypto as a hedge against inflation. Blackrock recently joined forces with coinbase which will give BlackRock clients access to Bitcoin and the wider crypto market.

Retail investors are yet to make a move due to the current market crash while institutional investors have been making big moves recently resulting in the alteration of prices.

 Bitcoin’s rally “may be attributed to the recent optimistic headlines on continued institutional adoption of crypto”. Blockfi stated in a recent note.

Coinbase stated during the second quarter earnings report that retail investors have minimized their activity during this period of the price rally

“That’s part of the issue — for it to succeed or to succeed further, I think it’s got to have more of a networking effect. It’s got to have more people participate in it,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

Retail investors have been participating but not enough to alter the cryptomarket, This suggests that retail is participating, just not yet in the kind of size that would add more momentum to the overall market”.stated Glassnode.