• Retail holders of Bitcoin i.e, addresses holding less than 10 BTC, have increased their relative share of the circulating supply since May 2022.
• The crypto space witnessed a surge in daily transactions last month, with the transaction count being up but transfer volume disproportionally low.
• This is indicative of increased demand for self-custody as well as the Ordinals protocol making mass-minting of both fungible tokens and non-fungible tokens possible.
Retail Investors Increasing Bitcoin Holdings
Retail holders of Bitcoin i.e., addresses holding less than 10 BTC, have increased their relative share of the circulating supply since May 2022 when the crypto space was wrecked by one of the biggest implosions ever, marking the beginning of the bloody bear market. Currently, this cohort has jumped on board with greater enthusiasm due to an increase in demand for self-custody and the Ordinals protocol making mass-minting of both fungible tokens like BRC-20 and non-fungible tokens (NFTs) possible.
Transaction Count vs Transfer Volume
The divergence between transaction count and transfer volume in May indicated that retail investors were dominant over institutional ones. Typically, situations like this put to test the resiliency of individual investors who are usually first to exit out of fear for further losses; however, this hasn’t been the case this time around as reflected by an increase in their portfolios amounting to 790,000 BTC from 13.7% following the LUNA collapse to 17.54%.
Surge in Transactions
Bitcoin network witnessed an unprecedented spike in daily transactions last month, so much so that top exchanges had to suspend withdrawals owing to high transaction fees; however despite this frenzy being driven by low-value transactions executed typically by retail holders of coins –the transfer volume remained disproportionally low compared to its transaction count.
Implication on Bitcoin Adoption
The increasing participation from smaller entities indicates growing adoption amongst retail holders which could lead to wider use cases for Bitcoin beyond just speculative investing or trading activities which it has been mainly used for until now. This could potentially lead towards higher user engagement and propel prices upwards eventually recovering from its current bearish trend if all goes well!
Conclusion
In conclusion, it can be said that while macroeconomic outlook remains uncertain due to recent financial implosions –on a micro level a lot has changed within Bitcoin’s ecosystem with increasing activity amongst smaller entities indicating growing adoption amongst retail holders leading towards higher user engagement which could eventually fuel a bull run!