The dominance of retail traders in the first quarter’s spot Bitcoin ETF volume is believed to be the main reason behind the lack of mass adoption of on-chain digital assets. Jim Bianco, a macro investment researcher, claims that approximately 85% of spot Bitcoin ETFs in the United States are controlled by retail traders. According to Bianco, the recent 13F filings to the US SEC show that only 3% of the market cap of these ETFs is held by investment advisors, with the rest being held by hedge funds. This revelation has led Bianco to compare spot BTC ETFs to “Orange FOMO poker chips,” indicating that retail traders are speculating on Bitcoin in the same way they do with meme coins. Bianco also points out that the average trade size for spot Bitcoin ETFs is around $15.3k, much lower than the average size for traditional spot ETFs, which is over $200k. He believes that retail traders are drawn to spot Bitcoin ETFs because of the simplicity of storage, rather than regulatory clarity. Bianco argues that this trend is detrimental to the web3 industry and calls for the development of a new decentralized financial system. Despite this, the ongoing adoption of spot BTC ETFs has significantly boosted the price of Bitcoin, indicating increased demand. At the time of writing, Bitcoin is trading at around $70k and has experienced a notable shift in dominance towards the altcoin market.
