Retail Gains Amid Institutional Influx in Q1: CoinDesk Quarterly Review

The suits are here to stay, but retail isn't going away.

That's just one of the takeaways from CoinDesk Research's hot-off-the-presses "Quarterly Review for Q1 2020." During the period we saw the consolidation of institutional involvement, with new names joining MicroStrategy in the bitcoin-on-balance-sheet movement, and with well-known traditional financial institutions announcing plans to roll out crypto services.

At the same time, the first quarter also saw the emergence of retail investors as a market driver. Activity on retail-focused exchanges surged along with institutional trading, which suggested growing leverage in crypto markets as retail exchanges allow more leverage than institutional exchanges do. Meanwhile, metrics showed profit-taking by larger holders.

In more than 100 slides, our Q1 review also looks at the evolution of the BTC and ETH markets, as well as developments in decentralized finance (DeFi), stablecoins and – of course – non-fungible tokens (NFTs).

Crypto market infrastructure companies completed impressive fundraising rounds, and some even announced plans to go public at hefty valuations, signaling a strong belief in the potential of enduring growth and future profitability of crypto markets.

The enthusiam for crypto also started to spill over into ether, the native token of the Ethereum blockchain, highlighting the industry’s technological progress, and a deeper understanding of the benefits of crypto asset diversification.

The explosion in interest in NFTs from investors, celebrities and the general public caught us by surprise, but in retrospect it shouldn’t have. Combining culture and connection with new technology, new experiences and astonishing prices makes for an irresistible cocktail of creativity and meme investing. Whether this is an extension of the change in investing culture that the GameStop saga highlighted or the emergence of a new type of asset classification or the development of new types of micro economies and business models or all of the above, both the hype and the substance had us transfixed.

Stablecoin developments were dominated by the surge in supply, driven in part by increased exchange and over-the-counter activity, and by the conclusion of a multi-year investigation by the New York Attorney General into the internal finances of Tether and its sister exchange, Bitfinex.  

The report also looks at the growth in value held in DeFi applications, transaction growth, token appreciation and more.

Download the full 110-slide report for free on the CoinDesk Research Hub.