Crypto analyst Miles Deutscher believes that retail investors could be on the verge of a comeback to the cryptocurrency market. He pointed to BlackRock’s application for a spot Bitcoin ETF in June 2023 as a significant turning point, marking a shift in institutional perception of Bitcoin. The subsequent approval and launch of Bitcoin spot ETFs in January 2024 led to substantial capital inflows, pushing Bitcoin to new all-time highs. Despite Bitcoin’s strong performance, Deutscher observed that altcoins have not followed suit, attributing this to the altered dynamics of liquidity flow due to ETFs and the lingering negative impact of the 2022 market crash on retail sentiment.
Looking ahead, Deutscher identified several factors that could bring retail investors back to crypto. He highlighted the potential for Bitcoin to break new highs, the inherent appeal of crypto as a speculative asset, and the emergence of genuine use cases for blockchain technology. He concluded optimistically, stating that retail’s return is a matter of time and could happen sooner than expected.
Deutscher’s analysis draws from the explosive growth of the crypto market in 2021, which saw a remarkable 2,672% rally from March 2020 to November 2021. This surge was fueled by a confluence of factors including unprecedented money printing, stimulus packages, and a population confined to their homes due to the pandemic. During this period, altcoins like Solana, Fantom, and Avalanche experienced exponential gains, with some achieving multiples of 500x or more. However, the bubble burst dramatically in May 2022 with the collapse of LUNA and UST, wiping out $45 billion in market value. This event, followed by a series of high-profile crypto company failures, including FTX, severely damaged the industry’s reputation and left many retail investors burned.
Deutscher’s perspective emphasizes the evolving landscape of the crypto market, with institutional investors playing an increasingly significant role. The influence of Bitcoin as an institutional asset class is expected to be further explored at Benzinga’s upcoming Future of Digital Assets event on November 19.
