Web 3 Journalist
Tim Hakki
Web 3 Journalist
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Coinbase Global Inc. (NASDAQ:COIN) CEO Brian Armstrong tweeted Sunday that retail traders are diamond handed, continuing to purchase Bitcoin (BTC) and Ethereum (ETH) despite ongoing market volatility.
While institutional heavyweights now dominate the platform’s volume, individual investors are aggressively buying the dip rather than capitulating.
Key Takeaways
- Strong Accumulation: Retail users are ignoring bearish signals to accumulate BTC and ETH during price drops.
- Volume Divergence: Retail trading has shrunk to just 6.62% of Coinbase’s total volume, down from historic highs of over 80%.
- Institutional Era: With $120 billion in recent quarterly institutional volume, the market structure has fundamentally shifted away from retail-driven rallies.
Why Is the Market Watching Retail Flows?
Armstrong’s comments come at a critical juncture. Historically, retail capitulation signals a market bottom, but current data suggests users are holding the line.
By confirming that verified users, now estimated at 120 million, are net buyers, Armstrong is countering the narrative of a retail exodus.
However, the mechanics of the market have changed. Historical patterns of retail inflows had often correlated with seasonal liquidity events, but today’s resilience suggests a structural shift in holder behavior.
Users aren’t just trading; they are accumulating blue-chip assets. This matters because while institutions provide volume flexibility, sticky retail capital often sets the support floor for major assets.
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Breaking Down the Numbers: The Institutional Takeover
The data paints a stark picture of Coinbase’s evolution from a retail app to an institutional powerhouse. According to usage statistics, retail volume hit approximately $43 billion in Q2 2025.
While substantial, this figure represents only 6.62% of the platform’s total $425 billion quarterly volume. Compare this to Q1 2018, when retail commanded over 80% of activity.
Despite the shrinking volume share, the revenue story remains robust. In a shareholder letter, Coinbase reported $6.6 billion in total revenue for 2024, driven by a user base where the average account holds over $5,000 in crypto assets.
Institutional volume crushed retail figures, recording $120 billion in recent quarters (a 71% share).
Armstrong’s emphasis on retail buying “during the dips” highlights a divergence: institutions trade the spread, but retail buys the asset.
What Does This Signal for Price Action?
The narrowing gap between retail sentiment and price direction is a great metric to watch. If retail continues to bid on dips while institutions hedge, the Bitcoin floor may be higher than technical charts suggest.
BitMEX co-founder Arthur Hayes believes falling fiat liquidity as the primary driver for recent choppy action. The lack of retail panic selling removes a key source of downside pressure.
This dynamic also reinforces the bullish case for Coinbase stock. Institutional investors like Ark Invest monitor these retention metrics closely to gauge revenue durability.
Ultimately all eyes will be on Coinbase’s upcoming earnings report; if the retail volume percentage ticks up from 6%, volatility could return quickly to the altcoin markets.
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