Retail Bitcoin Inflows to Binance Collapse Over 80%

Since early 2023, retail Bitcoin inflows to Binance have plunged more than 80%, dropping from around 550 BTC daily to just 92 BTC.

This steep decline reflects a major shift in the behavior of smaller Bitcoin holders—often called "shrimps"—who own less than 0.1 BTC.

Data from CryptoQuant, highlighted on X by Darkfost, confirms this drastic downtrend in deposits from these small addresses, marking a "brutal collapse in participation."

Despite Bitcoin’s price holding steady above $60,000 for much of this period, retail holders have pulled back from sending their BTC to exchanges.

This signals reduced retail influence on short-term market movements, with many smaller investors opting to hold rather than trade or sell.

Spot ETFs Trigger Shift in Retail Investor Behavior

The launch of spot Bitcoin ETFs in January 2024 accelerated the decline in retail inflows. Prior to this, inflows from small holders hovered around 450 BTC daily on Binance.

After ETF approval, inflows dropped sharply to an average of 92 BTC a day—a fivefold decrease.

This dramatic shift suggests many retail investors migrated to ETFs, seeking regulated and institutional-grade exposure rather than direct on-chain ownership.

As reported on CryptoQuant and shared by Darkfost on X , the fall in retail participation stems from three main factors: some investors moved capital to ETFs; others chose to hold Bitcoin longer-term instead of selling on exchanges; and some have accumulated enough BTC to move out of the "shrimp" category altogether.

This behavioral change underscores a structural transformation in the Bitcoin market.

Institutional players and large holders now dominate liquidity and price influence, replacing the retail investors who once propelled bullish runs.

The ongoing retreat of retail inflows during this cycle highlights how Bitcoin's market dynamics have evolved.