Retail trading is still driving the BTC rally, says CZ

13 Jul, 2019
by David Robb
Opinion
Retail trading is still driving the BTC rally, says CZ

In a recent interview with Bloomberg, Binance CEO Changpeng 'CZ' Zhao discussed the ongoing Bitcoin rally. He believes that retail trading remains the key driving factor behind the price growth.

Many influential crypto observers have pointed to the introduction of institutional investment into the crypto market as the key factor explaining the return of the bull market. After over a year of bearish signs, BTC finally kicked back into gear roughly around the time that major established financial entities were dipping their toes into crypto for the first time. Demand for CME's BTC futures contracts skyrocketed, and Fidelity's custodial solutions were starting to be rolled out.

However, CZ believes that the importance of retail investment shouldn't be underestimated: "We have not seen institutions growing faster… What we’ve seen is pickup in both places. The number of institutions coming into this industry has not increased that tremendously in 2019 yet". Around 60 percent of BTC activity appears to be from retail traders, which isn't a significant change from the ongoing bear market of 2018.

Zhao believes that margin trading will continue to grow in popularity, and should start to have as much influence on crypto price activitiy as spot trading currently does. He said that "the majority of people by the end of the year will be using margin in some capacity [as its] quite safe to use, to be honest". although there is likely to be more volatility as a result. Binance recently launched margin trading to its users for the first time, and it has seen around 10,000 traders signing up for margin accounts so far.

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