JPMorgan Attributes Recent Crypto Surge to Retail Trader Impulse

• An additional sign of retail crypto interest is the increasing popularity of AI and meme tokens.
• Analysts headed by Nikolaos Panigirtzoglou of JPMorgan released a report.

According to analysts at JPMorgan, the current spike in cryptocurrency prices is not due to market fundamentals or institutional investors but rather to irrational trading choices made by individual traders.

On Thursday, analysts headed by Nikolaos Panigirtzoglou of JPMorgan released a report stating that, similar to stocks, they found that the retail impulse into crypto rebounded in February. This, in turn, is likely what caused this month’s robust crypto market surge.

Over the last 12 months, the GMCI 30 Index, which tracks the performance of the 30 most popular cryptocurrencies, has increased by more than 13%.

Dramatic Increase in Retail Interest

When looking at on-chain cumulative bitcoin flows, differentiating between small and big wallets, and accounting for inflows into new spot bitcoin exchange-traded funds, the analysts found clear evidence of retail impulse.

While the final investor may be a retail person, this change is necessary since the bitcoins owned by retail investors who have invested in the new spot bitcoin ETFs are actually kept in bigger institutional wallets.

Moreover, an additional sign of retail crypto interest, according to the analysts, is the increasing popularity of AI and meme tokens. Also, in February, they said that the percentage of the cryptocurrency market valuation that was attributed to AI and meme tokens rose again.

Similar to the boom in equity market activity in the final quarter of 2023, experts saw a dramatic increase in retail interest in cryptocurrency towards the year’s conclusion. Block, PayPal, and Robinhood are examples of conventional brokerages that provide retail clients with crypto trading and custody services; their quarterly reports support this increase, they said. 

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