BIS report shows retail Bitcoin buyers increase during bull markets

BIS report shows retail Bitcoin buyers increase during bull markets

The rise in the price of Bitcoin (BTC) is the most significant catalyst in the growth rate of new investors as opposed to other factors like distrust in public institutions like banks or search for a store of value, according to a report published by the Bank for International Settlements (BIS) on November 14, 2022.

Bitcoin price surges attract traders to exchanges

BIS, an international financial institution owned by central banks, has released a report entitled “BIS Working Papers,” highlighting the relationship between Bitcoin (BTC) prices, cryptocurrency trading, and retail adoption. 

The report suggests that Bitcoin investors are more likely attracted by the cryptocurrency’s rising price rather than their dislike of banks or its perceived use as a store of value. According to the study, most retail investors downloaded cryptocurrency applications when prices were high (during a bull market).

Rising BTC price behind crypto adoption

The report noted that over time, as the price of Bitcoin ‘mooned’, so did the number of active users in the crypto space. It indicated that Bitcoin’s price rose from $250 in August 2015 to $69,000 in November 2021. During this period, the monthly average number of daily active users (DAU) rose from 119,000 to over 32.5 million. 

Furthermore, about 40% of these new users are men under 35, commonly identified as the sample’s most “risk-seeking” group.

“Users [are] being drawn to Bitcoin by rising prices— rather than a dislike for traditional banks, the search for a store of value or distrust in public institutions.”

The report added.

The study also noted an interesting trend; it revealed that big investors usually move in the opposite direction whenever BTC prices go up. According to the BIS, as BTC prices soar, retail investors tend to buy, whereas whales tend to sell some of their assets, resulting in a profit at the expense of the smaller investors.

Turkey, Singapore, and the U.S leading the way in crypto adoption

The study covered the demographic distribution of crypto adoption across countries.

It found that between August 2015 and June 2022, Turkey, Singapore, the United States, and the United Kingdom had the highest total downloads per 100,000 people respectively.

Meanwhile, India and China had the lowest adoption rates, with China recording a meager 1,000 cryptocurrency application downloads per 100,000 people. BIS identified stiff legal restrictions in these countries on crypto as the major stumbling block in the growth of adoption.

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Ogwu Osaemezu Emmanuel

Ogwu Osaemezu Emmanuel is a graduate of Mass Communication and Media Studies. He joined the blockchain movement in 2016 when a friend of his introduced him to an investment platform accepting bitcoin. He has never looked back since then. Emmanuel believes the world needs real change and freedom from poverty. He sees crypto and the underlying distributed ledger technology as the catalyst to a better future for all.