Santiment Network, a market intelligence platform, revealed that the number of crypto retail traders is shrinking as institutional traders rise to dominate the crypto space. Retail crypto traders have struggled to inject liquidity into the global crypto market due to declining economies and a lack of disposable income.
According to a discussion between the Santiment Network’s host and crypto enthusiast/analyst Denome, the crypto market currently relies on institutional crypto investors to pump the industry with more money, which comes through fiats and stablecoins.
The duo agreed that it was a weird time economically worldwide, although the government rate cuts in the U.S. and China could be a game changer.
Retail crypto market investors could be making a comeback
📺 Are crypto markets able to make higher highs despite the shrinking level of retail money? We discuss the role of institutional buyers, predicting upcoming prices with stablecoin patterns, and plenty more in our latest video! 👇https://t.co/SDOolAqmO6 pic.twitter.com/z1mTnxbTKG
— Santiment (@santimentfeed) September 26, 2024
Dan Raju, CEO of Tradier, determined that high interest rates scared crypto investors away while lowering rates was perceived as positive by the “crypto markets community.”
An S&P report also revealed that bull and bear runs in the crypto market coincided with periods of significant tightening or ultra-loose monetary policy. Cryptocurrency, however, was often touted as a “cure it all” for the U.S. dollar’s devaluation, inflation, lack of purchasing power, and low interest rates.
Chinese governor Pan Gongsheng also claimed that more funds would be injected into the country’s economy by lowering lending costs and cutting the cash held in banks to free up approximately $142 billion (1 trillion yuan) for new loans.
The analyst hoped that some of the money from the stimulus cheques would find its way into the crypto market through retail traders.
“The truth is that crypto prices have proven to be impacted by the same directional sentiment that impacts retail stock investors.”
–Dan Raju, CEO of Tradier
According to the crypto analyst, the U.S. Federal Reserve is currently focused on rate cuts and not printing new money to stimulate various economic drivers, including crypto investments. The Santiment host disclosed that the recent rate cuts had caused a few notable spikes in the crypto market, indicating increased activity.
The U.S. presidential elections could have a bullish effect on retail crypto trade
The analyst also explained that social mentions or trends regarding the two U.S. presidential candidates, Trump and Kamala, impacted crypto market shifts. He claimed that the crypto community was leaning bullish towards a Trump presidency.
However, mentions of both Trump and Kamala have caused crypto market spikes in various ways. Trump’s assassination attempt and Kamala’s replacement of Biden as the Democratic presidential candidate caused significant spikes in the crypto market.
The host noted that the crypto market experienced huge changes, whether instantaneous or gradual, every time the two top candidates mentioned crypto-related content, especially during debates.
According to the analyst, crypto investors are almost assured of a bullish crypto market trend if Trump wins, but they remain skeptical about what will happen under Kamala.
