- A new wave of retail investors are waiting to adopt digital currencies
- Unusually high mentions of Bitcoin on social media platforms could push prices higher
- Institutional and retail interest in Bitcoin and other digital currencies is on the rise
Bitcoin News Today – The digital currency custody and execution arm of the US financial service giant Fidelity – Fidelity Digital Assets – recently reported that retail investors would turn their attention to digital currency as they become more familiar with Bitcoin and other digital currencies through social media platforms. This means that a new wave of retail investors is waiting to adopt digital currencies.
Retail Adoption of Bitcoin Is on the Rise
The report stated that communication and social media platforms, including Telegram, Twitter, YouTube, Reddit, and Tik Tok are boosting the retail adoption of BTC. They distribute financial advice and information more rapidly and virally than traditional channels. A snippet of the report states:
“As this new wave of retail investors familiarizes themselves with these channels, some of their attention will undoubtedly flow to Bitcoin and other digital assets.”
Bitcoin (BTC) Price Today – BTC / USD
While the report of Fidelity Digital Assets mainly focused on the continuing flow of institutional investors to BTC, the firm carefully noted that the narratives for retail speculators are very different. They said:
“Bitcoin is reflexive,” suggested the report. “Price and sentiment experience a self-reinforcing effect.”
Abnormally High Mentions of Bitcoin on Social Media Could Increase BTC’s Price
The authors pointed to data from a sentiment analysis company – The TIE – showing that abnormally high mentions of Bitcoin on social media platforms could drive an increase in the price of the digital currency. The report added that the behavior of institutional investors and retail investors could be different, noting that data from Coinbase shows that the latter tend to “buy the dip” after a slide in prices.
The firm also pointed to the “retail resurgence” in traditional markets via the increase of platforms that make trading easier. This possibly includes millennial-favorite Robinhood, the use of which has surged significantly during the pandemic.
Included in the report is the continuing increase in the number of wallets holding less than a whole Bitcoin, and this shows that retail investors continue to see Bitcoin as an aspirational investment. Quoting Meltem Demirors of CoinShares – the report says:
“What is unique about Bitcoin is that it’s retail-driven. Financial media and the way people consume investment information is changing, and influencers command more attention than institutions.”
Fidelity also pointed to a lack of correlation between the price of Bitcoin and mainstream financial assets, but higher returns for Bitcoin investors over a long-term horizon. They also pointed out that institutional interest could increase the market cap of Bitcoin by up to $1.3 trillion by attracting only 10 percent of investors from alternative investments and fixed income.