- Retail investors drove the February crypto surge, anticipating Bitcoin halving and Ethereum updates.
- Trading on platforms like PayPal and Robinhood surged, showing increased retail activity.
- The rise in AI and meme token shares indicates further retail investor engagement.
JPMorgan (JPM) suggested in a recent analysis that the significant surge in the cryptocurrency market in February can be attributed to retail investors. The leading digital currency, bitcoin (BTC), experienced a 30% increase over the past month, while the Coindesk 20 index (CD20) saw a 24% rise, as per CoinDesk’s indices data.
This resurgence in retail investor activity is believed to be in anticipation of three key events in the crypto world: the upcoming bitcoin halving, a major update to the Ethereum network, and the potential approval of spot ether ETFs by the SEC in May, according to a team of analysts led by Nikolaos Panigirtzoglou.
According to JPMorgan, the initial two catalysts are mostly accounted for in current valuations, while the likelihood of the third occurring stands at 50%.
The report highlights evidence of retail investor participation through on-chain cumulative bitcoin transactions, which indicate a higher volume of transactions from smaller wallets, serving as an indicator of retail investor engagement.
Additionally, the analysis points out a surge in trading activity and investor inflows on platforms favored by retail investors, such as Block (SQ), PayPal (PYPL), and Robinhood (HOOD), during the fourth quarter of 2023. Similarly, Coinbase (COIN) experienced an uptick in retail investor trading activity within the same timeframe.
The bank noted a resurgence in the proportion of artificial intelligence (AI) and meme tokens within the overall cryptocurrency market in February, signaling a further increase in retail investor activity.
