The return of intense trading activity in equity markets is reigniting questions over whether Bitcoin can repeat its impressive rise of 2021. Back then, the largest cryptocurrency more than doubled its value, from approximately 29,000 dollars at the end of 2020 to almost 65,000 dollars in April 2021, while retail investors turned en masse toward financial markets and derivative products.
Today, however, the picture is different. Despite the revival of investor interest in equities, Bitcoin has not demonstrated corresponding momentum so far, while outflows from exchange-traded funds (ETFs) linked to major cryptocurrencies intensify concerns regarding demand.
Options boom reminiscent of 2021
Daily trading activity in single-stock options now corresponds to an underlying stock value of approximately 700 billion dollars, a level approaching that of 2021, according to data provided by investment firm Carrick Lane and cited by the Wall Street Journal.
The rise of the options market in 2021 had been linked to the wave of new retail investors entering financial markets following the Covid-19 pandemic. The increased participation of retail investors in derivative products coincided chronologically with the impressive rise of Bitcoin.
Specifically, the cryptocurrency started 2021 at approximately 29,000 dollars and reached close to 65,000 dollars in April, recording an increase of more than 100%.
This chronological coincidence, however, does not prove that the boom in options trading caused the rally in Bitcoin. These are two developments that played out in parallel, without available data documenting a direct cause-and-effect relationship.
Risk appetite returns, but investors choose stocks
Investor sentiment among retail investors appears comparable to that of 2021, according to the Wall Street Journal. Data from the American Association of Individual Investors shows that 40.3% of respondents anticipate a rise in stock market prices within the next six months.
However, the warming of optimism does not necessarily translate into broad positioning in high-risk assets such as cryptocurrencies.
Analysts point out that in 2026 retail investor flows are concentrated in a limited number of stocks, rather than being distributed across the broader market. Even the most cautious investors continue to take positions in equities, with an ETF investing in dividend-yield stocks topping the purchases made by clients of Charles Schwab in September.
This picture suggests that the return of retail investors does not automatically mean that demand for Bitcoin will strengthen to the same extent.
Pressure on Bitcoin ETFs and continuous outflows from Ethereum
Bitcoin is trading just below 84,000 dollars, while American spot Bitcoin ETFs recorded net outflows of 65.40 million dollars on October 12, according to cryptocurrency data platform SoSoValue.
The outflows were attributed entirely to the iShares Bitcoin Trust (IBIT) of BlackRock. In parallel, total inflows into Bitcoin ETFs had been limited to approximately 232 million dollars over a period of 13 trading sessions up to October 9.
The picture was even more pressured for spot Ethereum ETFs, which posted net outflows of 85.39 million dollars, extending the negative streak to ten consecutive days.
These figures reflect the difficulty in attracting fresh capital into these specific investment products, despite heightened trading appetite in stock markets.
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