Bitwise Chief Investment Officer, Matt Hougan, has unveiled a significant disparity between the sentiment of professional and retail investors in the cryptocurrency market. While seasoned investors maintain an upbeat outlook on the crypto market, the interest of retail investors has plummeted to unprecedented lows unseen in previous years.
This viewpoint is widely shared in the crypto sphere, though it’s argued that it fluctuates among different cryptocurrencies. “The gap between the sentiment of retail and professional investors in the crypto space is incredibly vast right now,” stated Hougan in a post on February 7.
“Retail sentiment is at its lowest in years, while professional investors are extremely bullish. It feels like inhabiting two entirely different realities,” Hougan added.
The Crypto Fear and Greed Index, an indicator of overall crypto market sentiment, reflects a “Fear” rating of 44, a drop of 25 points from the previous month’s “Greed” rating of 69. James Seyffart, a Bloomberg ETF analyst, attributes this decrease to retail investors holding a plethora of altcoins and memecoins, which have suffered substantial losses. The top three memecoins by market cap have declined over 20% in the last week.
As per CoinMarketCap data, Pepe (PEPEUSD) has fallen by 35.31%, Shiba Inu (SHIBUSD) by 20.82%, and Dogecoin (DOGEUSD) by 24.69%. A crypto trader going by the pseudonym DFarmer stated, “I can’t recall a prolonged altcoin slump this severe.”
DeFi Dad, in a concurrent post, pointed out that Solana (SOLUSD) retail sentiment is “slightly more bullish than professionals,” whereas for Ether (ETHUSD), it’s the reverse. “Retail sentiment for ETH is at its all-time low—probably more bullish with professionals,” he said.
Solana has emerged as the go-to network for memecoin traders, leading to heightened retail interest. In contrast, Ether is being snapped up by the DeFi project of US President Donald Trump, World Liberty Financial, catching the eye of crypto professionals.
Trump’s victory in the November elections sparked a wider crypto surge, propelling Bitcoin to touch the $100,000 mark for the first time in December 2024. But recent global events, such as Trump’s tariffs on Canada, Mexico, and China, rattled the market, causing the biggest crypto liquidation event ever witnessed.
Even though Trump suspended the proposed tariffs on Canada and Mexico following negotiations, Bitcoin continues to trade below the crucial $100,000 psychological threshold, priced at $96,609 at the time of writing.
