Report Reveals Retail Investors Flocking Back to Crypto

A new report from Bloomberg shows retail investors are starting to pile into crypto again as the FOMO cycle once again lurches back into moon mode and the minds of crypto investors everywhere start to turn to which colour their Lambo should be. 

According to Bloomberg’s report, major crypto exchanges Coinbase and Robinhood both saw huge increases in retail investor activity in Q4 2024. Activity is still nowhere near the heights of the previous crypto bull run in 2021, suggesting we might be just at the start of a new crypto bull cycle.

Report: Big Growth In ‘Mom And Pop’ Investors

The report cited a letter Coinbase sent to its shareholders last Thursday that said its consumer transaction revenue was up 60% in Q4 of 2023—compared to the same period 12 months earlier—and up 80% from Q3 2023. 

Meanwhile the strongly retail-focussed exchange, Robinhood, reported last Tuesday that notional transaction volumes were up a whopping 242% compared to a year ago.

Another important sign of growing retail interest in crypto investing is an increase in downloads of centralised exchange apps. According to data from market intelligence firm SensorTower, there were 10 million downloads of Binance’s app in Q4 2023, up from around 8 million in Q4 2022. 

For perspective however, at the height of the bull market in Q2 2021 there were over 25 million downloads.

Does this mean we’re in a bull-run right now? Maybe — but there could still be a long way to go yet. 

Coinbase’s consumer trading volume is still only at around 16% of what it was at the height of the last bull market and there’s a bunch of bullish events on the horizon — including Bitcoin’s halving in around April and the potential approval of Ethereum spot ETFs some time this year. There’s ample scope for gains if the next crypto bull market resembles the last one.

Venture Capital Money Also Slowly Returning

A report from financial data company, Pitchbook, has found venture capital funding is also returning to crypto, with Q4 2023 being the first quarter where VC funding of crypto startups has grown since 2022. 

Pitchbook found there were 326 VC deals made with crypto startups in Q4 2023 totalling US$1.9 billion, this was described as a “tiny percentage” increase, but may indicate VCs are warming to the idea of funding crypto startups again after withdrawing from the space in the wake of the collapse of TerraLuna, FTX, Three Arrows Capital and a host of other crypto companies in 2022.