Where’s the smart money going? Retailers flock to cryptocurrencies as traditional finance is ‘forced’ to open new businesses

If the first half of the current bull market was the home of institutions, the second half of the bull market has quietly kicked off with a “retailer’s orgy”.

Where's the smart money going? Retailers flock to cryptocurrencies as traditional finance is 'forced' to open new businesses

This issue’s summary: A new generation of retail traders is trying to break free from traditional finance and flock to the cryptocurrency market, and in the face of this boom, traditional finance is having to re-examine and gradually embrace cryptocurrency.

With institutions leading the way, more and more retail investors are turning their attention to the cryptocurrency market. If the first half of the current bull market was the home of institutions, the second half of the bull market is the “retailer’s carnival”, which has quietly kicked off.

The “boom” of the cryptocurrency market vs. the “bust” of the traditional market

Recently, the cryptocurrency market has seen a surge in trading volume, while stocks and derivatives have seen a decline in trading volume.

In the crypto spot market, The Block data shows that trading volume on crypto exchanges soared from $1.17 trillion in March to $1.66 trillion in April, compared to less than $100 billion in April last year.

Where's the smart money going? Retailers flock to cryptocurrencies as traditional finance is 'forced' to open new businesses

(Photo credit: The Block)
Crypto derivatives have also seen a new wave of interest recently. Take Chicagoland (CME), for example, which announced the launch of a micro bitcoin futures contract on May 3. Trading volume exceeded 100,000 contracts in the first six days of availability. This is a brand new futures product from CME, following the launch of bitcoin futures in December 2017 and ethereum futures in February this year. Meanwhile, bitcoin futures contracts have been trading at an average daily volume of 17,549 contracts since breaking new highs in January this year, up 57% compared to December last year.

In addition to the increasing trading volume, crypto market sentiment has also reached a crescendo round after round: if there is a ceiling to this market, it must be people’s imagination.

But in contrast, the traditional equity and derivatives markets seem to have fallen into a slight lull.

On the stock side, the famous Wall Street investment bank Jefferies (Jefferies) statistics show that in April this year, the U.S. stock market volume fell 27%, stock options volume fell 14%, both reached the lowest level since October last year. In addition, this downward trend in Europe Deutsche Börse and the Swiss Stock Exchange also did so.

In addition, data from Tradeweb, a leading trading platform for bonds, credit derivatives and bond ETFs, showed that the average daily volume of all asset classes on the platform also fell to $896.8 billion in April, down from a daily average of slightly more than $1 trillion in average daily trading volume in the previous three months.

A bottom-up monetary revolution has arrived, and traditional institutions are being deconstructed and reshaped

As the global economy is hit hard by the epidemic, people are desperately looking for alternatives to the traditional banking system, and cryptocurrencies, represented by Bitcoin, are their first choice. After all, Bitcoin and its underlying technology offers these investors the best option available today to conduct their so-called banking business without having to enter a large financial institution.

The latest data from Coingecko shows that the total global market capitalization of cryptocurrencies now stands at approximately $2.54 trillion, having surpassed the dollar currency in circulation. Data released by the Federal Reserve Economic Database (FRED) on April 29 shows that the U.S. dollar in circulation is $2.15 trillion.

Where's the smart money going? Retailers flock to cryptocurrencies as traditional finance is 'forced' to open new businesses

(Image courtesy of Coingecko)

It is clear that the expansion of the influence of cryptocurrencies has not decreased in any way. With this trend, it seems that traditional institutions, banks and other financial institutions are not able to sit still, after all, the loss of customers means the loss of profit. For this reason, those companies that were already in the cryptocurrency space in the past have now accelerated their pace; while those companies that have been lingering on the sidelines have also shifted their attitude towards Bitcoin ……

PayPal is the first mainstream payment platform to support cryptocurrencies. in October 2020, it announced that it would follow the trend of global industry layout and launch cryptocurrency payment services. In April this year, it also completed the acquisition of Curv, an Israeli digital asset security company.

Led by PayPal, a number of other companies have followed suit. Among them, even JPMorgan Chase has shifted its attitude. Previously, JPMorgan CEO Jamie Dimon was known for his skepticism of cryptocurrencies. He has repeatedly blasted bitcoin and labeled it as a “fraud”. Recently, however, he has stated that while he is not a “supporter” of bitcoin, many of his bank clients like ……

For a while, crypto assets have been the “guest of honor” of these giants.

CNBC reports that executives at cryptocurrency custodian New York Digital Investment Group (NYDIG) say hundreds of U.S. banks are preparing to offer bitcoin (BTC)-related services to their customers, and will soon allow them to buy, hold and sell bitcoin through their existing accounts.

What’s clear to the naked eye is that giants are scrambling to be the first to lay out cryptocurrencies, and the bridge connecting traditional currencies to cryptocurrencies has already been built. The reason behind this is that rather than embracing cryptocurrencies, they don’t want to lose their customers.

On the one hand, the market is just getting hot and no one is willing to lag behind under the driving effect of many star companies; on the other hand, the business development of traditional banks and payments is facing a certain bottleneck period, and now the bull market effect of the crypto market is obvious. On the other hand, traditional banking and payment businesses are facing a certain bottleneck so far, and now the bullish effect of the crypto market is obvious, exploring cryptocurrency can open up new business and thus better retain customers.”

In addition, he added: “Integrating cryptocurrencies into the traditional payment system can also change the extremely inefficient payment methods of cryptocurrencies and explore more efficient, secure and cheaper payment methods. The standard settlement process precipitated by these payment giants in their past development will also help the future popularity and application of cryptocurrencies.”

With the new round of cryptocurrency revolution, whether actively embraced or passively accepted, people in traditional finance are also forced to re-examine the relationship with cryptocurrencies, and the recent market reaction may intensify this pace for them.

Recently, the market has seen a resurgence of the drama of the game post against Wall Street institutions earlier this year, this time with the masses represented by dogcoin holdings setting off another encounter in the crypto space against the traditional elite represented by bitcoin holdings. How will it end up? It is not yet known.

But one indisputable fact is that unlike the “MEME coin” that soared a few days ago, the cryptocurrency market has been “plummeting” since May 12 in exchange for a moment of calm. But is this a precursor to the storm or the darkness before the dawn? I believe time will give the answer.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/wheres-the-smart-money-going-retailers-flock-to-cryptocurrencies-as-traditional-finance-is-forced-to-open-new-businesses/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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