Financial institutions have stepped up participation in crypto markets this year while retail investors have pulled back, Exodus CEO JP Richardson said. “This might be the first cycle in crypto history where institutions are in a bull market, and retail doesn’t even know it,” he said.
Richardson pointed to several signs of institutional activity: stablecoin market capitalization hitting an all-time high, Morgan Stanley launching a Bitcoin ETF, Charles Schwab opening a waitlist for spot Bitcoin trading, Franklin Templeton creating a crypto division and Fannie Mae accepting Bitcoin-backed mortgages. “In 2018 and 2022, institutions pulled out with retail. This time, they accelerated,” he added.
The change suggests crypto may be shifting from volatile, retail-driven hype cycles toward a more mature, institution-led market with steadier accumulation, deeper liquidity and less reliance on emotional spikes or panic selling.
Cost of living crisis keeping retail away
MN Fund founder and crypto YouTuber Michaël van de Poppe echoed the view, saying “It’s super clear that retail isn’t interested in crypto.” He noted many people are struggling to pay monthly bills amid rising living costs and inflation, and concluded: “That’s why this cycle won’t be the retail cycle. It’s the institutional cycle and will take longer.”
CryptoQuant analyst Darkfost reported retail activity reached a nine-year low, with inflows from small accounts (under 1 BTC) on Binance falling to a record low. “Retail investors are clearly absent from the market,” he said, and suggested some retail participants have rotated into equities and commodities, which have also performed well.
Near-term sentiment remains fragile
CoinEx chief analyst Jeff Ko said near-term sentiment is fragile and heavily driven by macro factors—particularly oil, the dollar and inflation expectations. “At this stage, the move still looks more like a macro risk premium overwhelming the near-term bid than a genuine deterioration in crypto appetite,” he said. Ko expressed more confidence over the medium term, noting he does not expect oil prices to stay elevated given supply-demand fundamentals.
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