Who is buying Bitcoin? Retail demand is expected to surge when the 2024 halving occurs

Ray Salmond

Odaily Planet Daily Translator | Yu Shunsui

New research from crypto derivatives exchange ZUBR, released June 29, found that despite long-standing rumors that institutional adoption is needed to drive cryptocurrency trading prices higher, retail investor participation is actually still increasing.

The recent halving seems like just a distant memory, and with Bitcoin price hovering in the $9,100 range, the current price action is far from the post-halving surge that many retail and institutional investors had expected.

Despite the lackluster price action, multiple bullish factors point to significant growth in investor participation, including record growth in the number of Bitcoin whales, all-time highs in the number of wallet addresses with balances of less than 1 BTC, all-time highs in Bitcoin outflows from exchanges, and Bitcoin’s recent third-best Q2 performance ever.

Additionally, increasing demand for Bitcoin from Grayscale Investments, Square, and others suggests that demand is coming from both institutional and retail investors.

Total number of addresses with a balance of 1-10 BTC, source: Chainalysis

Meanwhile, data obtained by ZUBR from Chainalysis shows that in April 2020, there were more than 500,000 wallet addresses with a balance of 1-10 BTC, “and these addresses have been growing every month since the bear market began after the Bitcoin price peaked in 2018.”

According to ZUBR, “by the time the next block reward epoch (aka halving) arrives in 2024, retail could consume more than 50% of the physical supply.”

There has been a lot of discussion about the correlation between the stock market and Bitcoin in 2020. As the market plunged in March 2020, risk assets like Bitcoin quickly followed.

Normally, a sharp drop in Bitcoin prices, such as the 50% drop on March 13, would dampen demand at the same time as a stock market downturn. But data from ZUBR shows the opposite.

Despite the more than 50% drop in Bitcoin prices on Black Thursday, demand from retail investors remained strong, and there was no significant decline in the number of Bitcoins in wallet addresses associated with retail investors.

Monthly increase/decrease of BTC in addresses with a balance of 1-10 BTC, source: Chainalysis

Currently, 900 new bitcoins are mined every day, which is expected to drop to 450 by 2024. ZUBR predicts that by the time of the 2024 halving, retail demand could average more than 250 BTC per day, equivalent to more than half of the new daily supply.

Bitcoin retail demand forecast and supply, source: Chainalysis, ZUBR

What’s more, this retail demand figure may actually exceed ZUBR’s estimate, as its data only looks at wallet addresses with integer balances and excludes accounts holding non-integer amounts of BTC.

While it is difficult to predict the future price evolution of Bitcoin, it is clear that retail investors are not being squeezed out of the space by the influx of institutional money.

If ZUBR and Chainalysis’ predictions come to fruition, smaller investors will actually play a larger role in Bitcoin’s network and value dynamics by 2024.

This article is translated from https://cointelegraph.com/news/whos-buying-bitcoin-retail-demand-expected-to-double-by-2024-halving. If reproduced, please indicate the source.