Former Crypto Traders Assess Shifting Trends in Cryptocurrency Market

Explore insights from former crypto day traders as they evaluate the evolving market dynamics. Gain valuable perspectives on crypto trading trends.

Nov 5, 2023 - 08:24
Nov 5, 2023 - 08:25
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Former Crypto Traders Assess Shifting Trends in Cryptocurrency Market
Former Crypto Traders Assess Shifting Trends in Cryptocurrency Market

As the crypto market experiences a resurgence, former day traders express reservations about reentering the fray. This article delves into their perspectives on the changing dynamics of the crypto space.

Volatility Wanes, Interest Wavers

Peter To, a seasoned stock trader, once reaped over $1 million through day-trading Bitcoin during its bullish phases between 2013 and 2017. However, he now believes that the crypto market has lost its former appeal due to decreased volatility and predictability.

FTX Collapse and Industry Maturity

The collapse of FTX, a significant player in the industry, had a profound impact on retail investors. The subsequent market dip in 2022 prompted a 40% decrease in traders' returns, according to JPMorgan Chase & Co. Many in the industry see this incident as a turning point, signaling the end of a turbulent phase and the onset of a more stable era for cryptocurrency.

Optimism Surrounding Bitcoin's Rally

Despite its current levels being far from the 2021 peak, Bitcoin's recent climb above $35,000 has sparked optimism. The potential approval of the first Bitcoin-backed exchange-traded fund (ETF) by BlackRock Inc., coupled with a judge's decision to allow the conversion of a Bitcoin trust from Grayscale Investments LLC into an ETF, has contributed to this positive sentiment.

Resilience Amidst Setbacks

Retail crypto trading volumes have shown signs of resilience, rebounding from the aftermath of the FTX collapse. The Bitstamp exchange in the US has witnessed an increase from 33% to 35% in retail crypto trading as a percentage of total volume between the first and second halves of the year. Globally, this figure has risen from 8% to 9%.

The Perspective of Former Traders

Craig Murray, who once profited nearly $200,000 from crypto trading, narrowly avoided losses during the FTX collapse. His experience led him to question the reliability of the crypto market, ultimately prompting him to shift focus elsewhere.

Weekday vs. Weekend Trading Trends

A notable shift in trading behavior is observed in the discrepancy between weekday and weekend trading volumes. Previously, these volumes were more evenly matched, but nowadays, weekday trading volume averages 50% higher than its weekend counterpart.

Crypto's Evolution and Manipulation Concerns

Tim van den Berg, who engaged in trading various cryptocurrencies from 2016 to 2019, reflects on his experiences. Despite initial losses, he now navigates the market successfully through futures trading. However, he expresses concerns about the increasing manipulation within the crypto space.

The New Normal in Crypto Trading

Veteran trader Peter To emphasizes how the dynamics have changed. In the past, he capitalized on late-night market fluctuations. Nowadays, he notes that profits are more directly linked to market direction, making it a different game altogether.

Words of Caution for Aspiring Traders

Former trader Craig Murray advises caution to those considering entering the crypto market. He highlights the misconception of easy gains and urges individuals to approach with care and informed decision-making.

Also Read | ProShares Introduces First Ether Futures ETF for Bearish Crypto Traders

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