Between 2013 and 2017, investors like Peter To capitalized on the wild roller-coaster ride that was Bitcoin (BTC). As the cryptocurrency rose and fell dramatically during bull runs, he reportedly raked in over $1 million from day-trading activities. Now though, this New York-based professional stock trader sees less appeal with it.
In To’s interview with Bloomberg, volatility—a key attraction for traders like him who are hunting market inefficiencies—has dwindled significantly. This reduced frenzy diminishes Bitcoin’s allure to such risk-taking investors.
Transition Into Market Maturity
One significant shift shaking up the crypto landscape is its phase transition since chaotic scenes dominated exchanges like FTX just years ago. With the conviction of FTX co-founder Sam Bankman-Fried reaching finalization, many proponents believe we’re entering a more mature era ripe for mainstream acceptance.
This could signal tamer growth rates or fewer unique trading opportunities compared to yesteryear’s spectacular offers sparked by irrational exuberance around cryptocurrencies.
Bitcoin had shown a recent spark spiking above $35k after slumping massively post-FTX-collapse last year. However, retail investors have retreated regardless following poor return trends for the digital asset that fell about 40% throughout 2022, according to JPMorgan Chase & Co.
Market Conditions Improve but Crypto Day Traders Have Moved On
The situation is improving somewhat for crypto markets, with Bitstamp exchange witnessing an uptick in retail participation recently. But then again, the landscape has irrevocably altered as numerous day traders have already left and pivoted elsewhere.
Craig Murray illustrates this exodus. Having barely saved his earnings from evaporating during FTX’s collapse, he was dejected by the risk associated and now avoids investing his money within such a volatile sector.
Shifts in trading volumes on weekdays versus weekends suggest reduced retail activity compared to previous highs. Fredrick Collins of Velo Data notes how weekday volumes can often be 50% higher than weekend trades currently—a stark contrast against historical trends where it was nearly equal.
The Perils of Losses and Manipulation
Meanwhile, many others like Tim van den Berg bore hefty losses due to their involvement with highly unpredictable cryptocurrencies such as Bitcoin and Dogecoin over these years. The series of unlucky turns led them towards disenchantment around digital assets altogether amidst rampant market manipulation claims, too.
Van den Berg delineates how decentralization ideals are seemingly replaced by big capital manipulations now. He claimed that this has deflated much enthusiasm from small investors like him who initially turned to cryptocurrencies hoping for a fairer financial system.
The Game Has Changed
Peter To harks back on days when market anomalies could be seized upon profitably, which is something not characteristic of the current crypto markets anymore. Nowadays, he says that if Bitcoin’s value increases, you’d win and vice versa; exhibiting a much more directional path unlike previous times when traders relied heavily on volatility instead.
Craig Murray still does sporadic trading while focusing primarily on guiding newcomers through such digital asset trades. Yet, he advises caution due to rampant stories about quick fortunes misleading many into taking undue risks invariably leading to losses in most cases.
This combined set of present circumstances has apparently led many day traders away from Bitcoin—signaling an altered perception around this major cryptocurrency within these cohorts as we progress further into this new chapter of mainstream adoption.