Bitcoin has been trying to claw its way out of a bear market, but trading data suggest investors aren't rushing in to help.
The largest cryptocurrency (BTCUSD) traded at around $75,506 Wednesday afternoon - up 12% so far this month and on pace for its biggest monthly gain since April 2025, when it rose 14.3%, according to Dow Jones Market Data.
Yet trading activity remains muted. Bitcoin's trading volume recently fell below $8 billion - its lowest level since October 2023, when the benchmark crypto was trading below $40,000, according to Glassnode data, as shown in the chart below.
That gap matters because price gains can be harder to sustain when fewer investors are trading. The risk has become more noticeable as bitcoin attempts to rebound after falling into bear-market territory in November. A rally built on thinner activity can reverse quickly if investors lose their appetite for risk.
The weak participation in crypto is especially clear among retail-facing trading platforms. Robinhood's (HOOD) app-based crypto volumes fell 48% in the first quarter from a year earlier, following a 52% year-over-year drop in the fourth quarter, according to its earnings report Tuesday. Investors will get another read on crypto trading volumes when Coinbase (COIN) reports earnings next week. Representatives at Robinhood and Coinbase didn't immediately respond to emailed requests for comment.
The slowdown in crypto trading volume also has been showing up in bitcoin exchange-traded funds, which were supposed to make the asset easier to trade through traditional brokerage accounts. Among the 11 spot bitcoin ETFs first approved in January 2024, average volume over the past 20 trading days has fallen to 54.6 million shares - the lowest rolling 20-day average since October 2025, when it was 53.2 million, according to Dow Jones Market Data. Over the past year, daily volume has averaged 72.6 million shares.
One explanation is that, for now, investors may be chasing other parts of the market where momentum looks stronger, according to Louis LaValle, co-founder and CEO at Frontier Investments.
"The retail money has not rotated back into bitcoin," LaValle said in a phone interview. "The retail money is going into tech stocks; it's going into high-beta stocks. Bitcoin is being left out of the mix."
Robinhood's own numbers point to a similar split. Equity notional trading volumes on the platform rose 54% in the first quarter from a year earlier, while trading in options contracts climbed 17%.
That thinner backdrop could make bitcoin more vulnerable to shocks, especially as headlines around the Iran war, the Federal Reserve's leadership change and Big Tech earnings continue to jolt markets, LaValle noted.
"If you have a sizable position in bitcoin, you want to be hedged in this environment, because the low volume and low implied volatility right now sets up the environment where you can see pretty big swings," he said.
Still, muted activity from traders does not necessarily point to another leg lower for bitcoin's price, said Mark Palmer, senior equity research analyst at Benchmark. In crypto, trading activity often follows prices rather than the other way around, Palmer said in a phone interview. In other words, a stronger move higher in bitcoin could bring trading volumes back.
While it is hard to know what crypto's next catalyst could be, Palmer said he is closely watching the Clarity Act, a crypto market-structure bill that bulls argue would bring more regulatory clarity to the industry and encourage broader institutional participation. It would more clearly divide oversight of digital assets between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.
The bill is expected to face a Senate Banking Committee debate and vote as soon as May, and a final version thereafter could head to the full Senate for a vote.
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