Despite strong performance, professional traders are avoiding cryptocurrency markets

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Bitcoin’s (BTC) huge gains this year have not brought cryptocurrency traders back to the market, according to data provided by Bitstamp.

Since the beginning of the year, retail trading volume on the US exchange’s platform has grown from 33% to 35%, while global retail trading volume has only grown from 8% to 9%.

Where are the day traders?

in conversation BloombergMany professional traders claim that despite once making huge profits in the industry, they have lost interest in cryptocurrencies – especially after the FTX crash in November 2022.

For example, Peter To, a 34-year-old professional stock trader in New York, said he made $1 million trading Bitcoin during the bull markets of 2013 and 2017. However, his 110% increase in assets since January is still not enough to get him back on the market.

Peter Tow said:

Bitcoin is no longer as volatile or driven as it once was. For traders like me who look for market inefficiencies, this isn’t all that exciting. The charm is gone.

Craig Murray, a 23-year-old trader who claims to have made more than $200,000 in cryptocurrency, said he almost took his own money after hearing rumors from friends in the industry that the exchange was about to collapse Money fled FTX. The incident convinced him that continuing to participate in such a market was no longer worth the risk.

Murray said:

This puts me on edge. I just decided it wasn’t worth it. Why would I leave my money in this space when one day it could all be gone?

Retail traders show signs of decline

In addition to falling retail volumes, a drop in weekend trading activity is another sign that traders are leaving the market. Fredrick Collins, CEO and founder of crypto data platform Velo Data, said it’s not uncommon for trading volumes to halve over the weekend, although weekday volumes have been relatively flat in the past.

This decline is also reflected in Coinbase’s latest earnings data, which shows that total trading revenue fell by 12% from the second quarter to the third quarter of 2023. Coinbase attributed the decline to lower market volatility. Coinbase is the only publicly traded cryptocurrency exchange and one of the largest spot market trading venues.

Indeed, cryptocurrencies are not the only market affected: retail investment in stocks also fell by 40% from the beginning of 2021 to the end of 2022, according to JPMorgan Chase.

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