Bang Bang: Critical Factors Fueling Rise of the Retail Investor

2021 started with a bang in global markets, propelled by the crypto and stock rallies. We have certainly felt it at eToro, with over two million new registrations since the beginning of the year, bringing our total number of registered users to more than 19 million.

The beginning of 2021 has been influenced by the crypto rally and by unprecedented global interest in the GameStop phenomenon, a trend which represents the rise of a new generation of investors.

2020 will go down in history as the year that not only gave way to a global pandemic but also to the rise of the retail investor. For us, this is the real story, and it’s a conversation we have been leading for the last 12 months. We are seeing record interest and participation by retail investors who make up nearly 25% of stock market activity on peak days. This trend is here to stay, we believe, and will continue to grow into the future.

A confluence of macro trends have led to this tipping point – zero (and negative) interest rates, an acceleration of digital transformation led by the Covid-19 pandemic and lowering the barriers to entry through automation, fractional shares and commission-free stock investing.

In recent weeks, we have collaborated with global leading media outlets that were interested in finding out more about the new generation of investors. eToro has been at the heart of this narrative. During these conversations I’ve frequently been asked, “Do you think these people should be investing?” I’ve consistently replied by asking, “Do you think they shouldn’t be?”

Becoming a successful investor can be achieved in a simple, enjoyable way when you have the right knowledge to trade and invest responsibly – this has always been eToro’s motto. We help boost our clients’ investment capabilities by providing the tools, which allow ideas, wisdom and expertise to be shared with an entire investment community, for everyone to use equally and openly. We highlight the importance of understanding the basic principles of investing, such as diversification and establishing an independent point of view based on data and analysis.

Our Popular Investors are a great example of this – they are becoming investment leaders. Some of our Popular Investors’ 2020 performance would be considered outstanding for any leading global hedge fund. And yet, these results were achieved independently by talented members of our community. This is the essence of our mission and the beauty of it – and this is just the beginning.

I’m looking forward with anticipation to see how the following months of 2021 will continue to shape the investment landscape.

Yoni Assia, eToro co-founder and CEO

Disclaimer

This is a marketing communication and should not be taken as investment advice, personal recommendation or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without taking any particular recipient’s investment objectives or financial situation into account, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past or future performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilizing publicly available information.

This post originally appeared on the eToro blog.

This content is sponsored and should be regarded as promotional material. Opinions and statements expressed herein are those of the author and do not reflect the opinions of The Daily Hodl. The Daily Hodl is not a subsidiary of or owned by any ICOs, blockchain startups or companies that advertise on our platform. Investors should do their due diligence before making any high-risk investments in any ICOs, blockchain startups or cryptocurrencies. Please be advised that your investments are at your own risk, and any losses you may incur are your responsibility.

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1inch Exchange Goes Live on Binance Smart Chain

Key Takeaways

  • 1inch has announced that its DEX will run on Binance Smart Chain alongside Ethereum, on which it currently operates.
  • The project cited high Ethereum fees as the reason for the move.
  • 1inch is offering 150,000 in 1INCH tokens ($650,000) to attract liquidity providers to the platform.


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Decentralized exchange (DEX) aggregator 1inch Exchange has launched its service on Binance Smart Chain (BSC).

1inch Expands to Binance Smart Chain

1inch Foundation has deployed its DEX aggregator and liquidity mining platform to Binance Smart Chain. The exchange initially launched on Ethereum in December, allowing users to access other DEXes like Uniswap, Balancer, Sushiswap, Mooniswap, and more.

However, rising fees on Ethereum have made those platforms overly expensive for small-scale investors. Now, it aims to offer its platform on Binance Smart Chain (BSC) to bypass those fees.


Sergey Kunz, 1inch co-founder and CEO, says that he sees “a significant opportunity for 1inch Liquidity Protocol to become the biggest liquidity protocol on Binance Smart Chain.”

Other BSC-based decentralized exchanges have become a success. Pancakeswap, for example, reached a higher volume than any Ethereum-based DEX last week. Presently, it is the third-largest DEX by volume, according to CoinGecko, just below Ethereum’s popular Uniswap exchange at #2 and Mdex at #1.

Other notable DEXes on Binance Smart Chain include BurgerSwap, StreetSwap, Venus, StableSwap, and JulSwap.


New Incentives for Liquidity Providers

1inch’s development team has added $10 million of 1INCH tokens to Binance Bridge, which will help ensure the token supply remains constant as funds move between platforms.

To kickstart the launch, the project has also introduced new incentives for liquidity providers who lock funds in BNB-1INCH pools. Over the next four weeks, participating providers will receive a total of 150,000 1INCH tokens, equal to 0.01% of the total supply or $650,000.

The price of the token jumped 10% from $3.99 to $4.41 during the hour following the announcement.

Disclosure: The author held Bitcoin at the time of press. 

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Arca Debuting Bitcoin Trust to Challenge Grayscale

In brief

  • The Arca Accredited Investor Bitcoin Trust is taking minimum investments of $25,000.
  • Grayscale Bitcoin Trust is very popular, holding more than 3% of the total supply of BTC.

Arca, a digital asset management firm, has filed paperwork with the US Securities and Exchange Commission (SEC) to create a Bitcoin Trust.

The Arca Accredited Investor Bitcoin Trust has an immediate challenger in the Grayscale Bitcoin Trust, which is the largest institutional buyer of BTC. Grayscale Bitcoin Trust holds an estimated 3% of the 21 million BTC that will ever be in circulation and held $20 billion in assets under management at the end of 2020. Thus far, Arca has raised $100,000 from investors—it made its first sale on February 16. 

The general utility of a trust is that it issues shares that roughly track the price of Bitcoin; investors can add exposure to Bitcoin in their portfolio without actually buying or holding any BTC. 

The downside of a trust is that it charges an investment management fee, and shares can trade at a premium compared to the actual asset. Put simply, Bitcoin trust investors can expect to pay more for the convenience of buying a regulated investment product. 

Moreover, buying shares of a Bitcoin product still comes with the same type of volatility as the underlying cryptocurrency. However, investors won’t have to worry about their private keys and may have more resources to shield earnings from taxes.

Arca both helps companies manage large amounts of cryptocurrencies and offers hedge funds for investors who want to dabble in crypto. Its latest fund is open only to accredited (i.e., wealthy) investors who can bring a minimum of $25,000 to the table. The securities are “restricted,” meaning the shares can’t easily be re-sold. (Grayscale, meanwhile, mandates a $50,000 minimum investment, with holders unable to sell for at least six months.)

While that lack of flexibility is inconvenient should the price of Bitcoin, currently hovering between $48,000 and $49,000, slide downward, it also helps restrict the available supply of Bitcoin for trading, theoretically helping to stabilize the price.

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Focus on DeFi ‘fairness’ benefits Holochain, Orion Protocol and Dodo

Bitcoin’s (BTC) strong bull run and the immense popularity of the decentralized finance space have attracted several new investors to cryptocurrencies. A report from Crypto.com shows a massive increase in crypto users as the figure rose from 66 million in May 2020 to 106 million by January this year. 

Crypto market data daily view. Source: Coin360

Contrary to the popular notion that new crypto users are mostly speculating on the price, data from Unchained Capital shows that investors who bought in the past three to five years are still holding and are not yet tempted to book profits.

Unlike the 2017 bull market where many low-cap altcoins rallied, the current bull trend has rewarded projects with strong fundamentals. Let’s have a look at three such tokens and also analyze their charts.