Analysis: Retail investor participation in the crypto market has remained low over the past year, and the narrowing basis has led to a slowdown in Bitcoin ETF inflows.

PANews reported on February 11th that Matrixport published an analysis stating that retail participation in the crypto market has remained consistently low over the past year. Using trading volume in the South Korean market as an indicator, retail buying demand remains weak. Insufficient retail demand and a lack of incremental buying support have hindered the rise of perpetual contract funding rates, keeping them low for an extended period. Low funding rates further compress the profit margins of basis trading (futures-spot arbitrage), thus limiting the incremental inflow of Bitcoin ETFs, keeping them at a relatively moderate level overall. This confirms the institution's assessment in March 2024: without retail-driven price action to push up futures-spot spreads, institutional fund allocation will be difficult to accelerate significantly, thus prolonging the current consolidation phase.