Decrypt: retail bitcoin investors buy the dip as institutional traders flee

The monstrous selloff bitcoin experienced on March 12 — which coincided with significant losses across most major markets — shook out quite a few investors who bought bitcoin post-2017. But some retail investors have been taking the dip as a prime buying opportunity. According to the most recent State of the Network report from blockchain analytics company Coin Metrics, “the number of addresses holding relatively small amounts of BTC has been increasing since the March 12th crash.”

This increase took root when Bitcoin plummeted to a yearly low of $3,800 (SFM Ed. note: $7296 at time of publication). With small purchases increasing and new wallets coming online, “this could signal that adoption is growing, as new users start acquiring relatively small amounts of BTC,” the report suggested.

The trend corroborates other data coming from the crash that suggest mom and pop investors are buying the dip. Crypto asset management company Bitwise, for example, published trading volume from popular exchanges the day after the dip that showed $5 billion in fresh inflows to Bitcoin.

Coin Metrics founder Nic Carter told Decrypt that this pattern is the inverse for some of the institutional investors who entered Bitcoin after 2017. While the little guy is using the dip to add to his stack, the big boys are tucking tail and running for the dollar: “It seems to me that the recent crash was very much a case of retail buying the dip and institutional investors meeting margin calls or getting out of the market,” he explained.

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