Retail investor participation in the crypto market remains subdued, extending the current consolidation phase, according to analysis from Matrixport.
In a chart released by the firm, Matrixport said retail engagement has stayed low over the past year. The firm pointed to trading volumes in the Korean market—often viewed as a proxy for retail activity—as evidence that meaningful buying demand from retail investors has yet to emerge.
The lack of retail inflows has weighed on derivatives markets. With insufficient incremental spot demand, perpetual futures funding rates have remained depressed, limiting opportunities for leveraged long positioning. Low funding rates have also reduced returns from basis trading strategies, such as cash-and-carry arbitrage.
As a result, institutional participation has remained measured. Matrixport noted that compressed arbitrage yields have constrained incremental inflows into spot Bitcoin ETFs, keeping overall ETF demand relatively moderate despite broader institutional interest.
The firm said this dynamic aligns with its earlier assessment from March 2024, when it warned that without a retail-led rally widening the futures–spot spread, institutional capital allocation would be unlikely to accelerate meaningfully.