According to on-chain data from analytics firm CryptoQuant, retail investors, once the primary drivers of crypto cycles, are being overshadowed by institutional flows from exchange-traded funds (ETFs) and corporate treasuries like MicroStrategy. CryptoQuant founder and CEO Ki Young Ju highlighted that Bitcoin wallets' average cost basis stands at $55,900, with holders up approximately 93% on average. Realized capitalization surged by $8 billion in the past week, indicating continued new money entering the network, yet Bitcoin's price has remained stable near $110,000 due to selling pressure rather than weak demand.
Young Ju emphasized that "Price hasn't gone up because of selling pressure, not because demand was weak," and noted that new inflows are primarily from ETFs and Bitcoin treasury companies. Retail deposits to Binance, tracked as "shrimps" (addresses with less than 0.1 BTC), have plunged over fivefold since early 2023, from about 552 BTC per day to just 92 BTC today. The launch of spot Bitcoin ETFs in January 2024 exacerbated this decline, offering an easier, regulated alternative for exposure.
Three dynamics explain the retail retreat: smallholders shifting to ETF exposure, holding coins off-exchange, or accumulating enough to exit the "shrimp" category. Demand is now driven mostly by ETFs and MicroStrategy (rebranded as Strategy), both of which have slowed their buying recently. However, Young Ju stated, "If these two channels recover, market momentum likely returns." The market cap has risen to $2 trillion from roughly $1 trillion in on-chain inflows, with whales' unrealized profits not extreme, suggesting either lingering hype or a maturing market.
Bitcoin's network hashrate hit a record high of approximately 5.96 million ASICs online, signaling long-term bullishness, while flows to futures platforms have slowed, indicating reduced leveraged positions. Young Ju described this cycle as harder to predict due to institutional dominance, contrasting with earlier retail-driven rhythms.
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