The participation from private investors in the cryptocurrency market has continued to decline throughout this cycle, and interest is further weakening as the year approaches its end.
Although some experts still interpret the declining engagement from the private market as a classic bottom signal, others believe that the current downturn reflects a deeper cultural and social shift, where investors' attention has completely moved away from crypto.
Marker retail bottom or a new phase?
The decline of the cryptocurrency market has led many experts to predict a possible bottom, referencing everything from on-chain data and technical patterns to changes in investor behavior. Among these indicators, the lack of engagement from private investors is often seen as a significant bottom signal.
Experts believe that periods of extreme pessimism and low participation have coincided with market bottoms, interpreting today’s widespread indifference as a similar turning point.
“Private investors are coming in at the TOP, not at the bottom, and the absence of private participation now suggests that this is not a market peak, but rather a bottom under development,” stated an expert.
But new data suggests that things may have changed. In a recent post, analyst Luc pointed out a deeper shift among individuals. According to him,
“It’s cultural. A social shift. Attention has moved.”
A clear sign is the declining interest in crypto content platforms. For example, a crypto YouTuber with 139,000 subscribers reported lower view counts than at any other time in the past five years.
Well-known crypto influencers are now also focusing on traditional stocks. Collectively, these trends indicate a waning attention, rather than a temporary correction.
Among younger investors, perceptions have changed. Crypto is now competing with available alternatives like prediction markets and crypto-related stocks, which have a lower risk of 'rug pulls.'
“All investment options are becoming more accessible. From COIN offering stock trading, to HOOD introducing 0DTE options, to prediction markets in general…Everything is right in front of you…without the perceived risk of a 'rug pull' via the 'lawless' crypto landscape that gave crypto its original appeal,” said Luc.
Recently, BeInCrypto reported that many new investors are choosing gold and silver over crypto in the face of persistent inflation and increased uncertainty in the economy. This points to a larger generational shift.
Crypto's reputation is also taking a hit due to multiple hacks and scams. According to Chainalysis, the crypto industry has lost more than $3.4 billion between January and early December.
Security incidents have increased during this period, where attackers are using increasingly sophisticated tactics to steal funds and deceive users.
“It is now considered embarrassing to engage in crypto. There are too many scams for the average user to handle. Children would rather work in AI or something else. The general population wants nothing to do with crypto – we didn't save face after luna + ftx + illiquid jpeg fiasco in 2022,” said Kate, another market observer.
Institutional entry is changing market dynamics.
At the same time that interest from the private market is declining, established financial institutions are expanding their presence in crypto. Polygon Labs’ Aishwary Gupta told BeInCrypto that institutions account for approximately 95% of crypto inflow, while private participation has fallen to around 5-6%.
From the growth of digital asset treasures (DATs) to traditional financial institutions taking steps into the market, the sector is increasingly being driven by institutions. However, increased institutional participation is a double-edged sword.
This provides legitimacy and easier access, but the sector's original appeal attracted people who wanted to escape traditional finance. Stronger institutional dominance could undermine the fundamentals.
“But when brokerage firms like Schwab/JPMorgan and the state show interest, does crypto lose the demographic that made it popular in the first place?” commented Luc.
Luc admitted that many of these dynamics have occurred in previous crypto bear markets, but he emphasized that new factors are now 'changing the game.'
“Crypto seems to be in a transitional phase…from a momentum asset to an infrastructure asset,” he added.
If private participation has indeed structurally fallen, the crucial question is whether real crypto utility in the real world can compensate for declining speculative demand. Blockchain adoption in payments, supply chains, and decentralized finance is growing.
It remains unclear whether these developments can create as much enthusiasm as previous market cycles. As 2026 approaches, the dynamics of the crypto sector may provide a clearer picture of whether this is a temporary phase or a lasting change.
