Bitcoin (BTC) has seen significant gains this year, but it hasn’t attracted many crypto day traders back into the market. According to data from Bitstamp, retail trading volume on the exchange’s US platform has only grown from 33% to 35%, while global retail volume has risen from 8% to 9% since the beginning of the year.
Where are the Day Traders?
Many professional traders have lost interest in crypto despite having made huge profits in the past. Peter To, a professional stock trader in New York, made $1 million trading Bitcoin during previous bull runs. However, he is not enticed by the asset’s 110% rise this year.
“Bitcoin is not as volatile or as driven as it was,” To said. “For traders like me who are hunting for inefficiencies in the market, it’s not as interesting. The allure is kind of gone.”
Craig Murray, another trader, narrowly escaped from FTX after hearing rumors about its impending collapse. This event convinced him that remaining in such a risky market was not worth it.
“That kind of put me over the edge,” Murray said. “I just decided it wasn’t worth it. Why would I have my money in this space when there’s a chance that one day it could just all go away?”
Signs of Declining Retail Traders
In addition to decreased retail volume, there has been a decline in weekend trading activity. Fredrick Collins, CEO and founder of crypto data platform Velo Data, noted that weekends with half the trading volume are now common, whereas volume used to be relatively equal throughout the week.
Coinbase’s latest earnings figures also show a 12% drop in total transaction revenue between Q2 and Q3 of 2023. Coinbase attributed this decrease to low market volatility. It’s worth noting that retail investment in equities also dropped by 40% between 2021 and 2022.
Hot Take: Crypto Day Traders Are Losing Interest
The crypto market’s massive gains this year have not been enough to bring back crypto day traders. Professional traders who were once attracted to the space due to its volatility and potential for profit are now finding it less interesting. The collapse of FTX in November 2022 and the overall decline in market volatility have contributed to traders losing faith and seeking opportunities elsewhere. This decline is evident in decreased retail volume, declining weekend trading activity, and lower transaction revenue for exchanges like Coinbase. It remains to be seen whether the allure of crypto trading will return or if traders will continue to seek alternative investment opportunities.
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