BIS Debunks a Misperception about Adoption of Bitcoin and Behavior of Retail Investors

At the time of writing, Bitcoin’s (BTC) trading price is at $16,796 and for now, there is not much retail interest in the digital asset.

This raises a question as to why retail investors are not interested in Bitcoin given the current market situation. However, the recent study conducted by the BIS has provided clarity on the matter.

Report Posted by the BIS

The Bank for International Settlements (BIS) has recently shared learnings from a study that it carried out about the crypto market.

The report provides clarity about the perception that investors are moving to crypto because they want to move away from traditional banking.

The report also confirms the behavior of retail investors toward crypto investments. It reveals when exactly the retail investors want to get into cryptocurrencies.

Both explanations point towards a single goal that is achieved by the investors as they interact with cryptocurrency trades.

Investors are Interested in Rising Prices

The study shows that the reason why investors invest in cryptocurrencies is not that they dislike banks. The reason they invest in cryptocurrencies is that they are attracted by the rising prices.

For a long time, cryptocurrency firms have claimed that people dislike traditional banking systems. As the crypto sector offers privacy and freedom, people are moving to cryptocurrencies.

This is the explanation that crypto firms adopt when they refer to people investing money into crypto as a store of value.

However, the BIS study has now confirmed that it is the price of the cryptocurrencies that attract investors. It is a fact that the crypto industry is the most volatile trading sector.

Investing in cryptocurrencies can result in enormous gains for investors, making them millionaires in a matter of seconds. This is the reason why people and retail investors go for crypto.

BIS Working Papers

It was on November 14, when the BIS shared the working papers revealing the relation between retail adoption, crypto trading, and Bitcoin prices.

The study shows that in most cases when the price of BTC has risen, the number of downloads of crypto trading applications has risen tremendously.

These are the occurrences where the trading activities of digital assets have risen significantly, significantly pushing crypto prices higher.

The study shows that downloads for crypto trading applications peaked whenever BTC hit all-time highs. These occurrences were Bitcoin hitting $50k, $60k, and then $69k between July and November 2021.

This goes to confirm that it is not the investors despising traditional banks but being attracted by the high trading prices of BTC and altcoins.

In light of the recent findings, the report predicts that if the price of BTC rises over $25k, then a strong rally would be formed. This is when retail investors would enter the market and invest heavily.

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