Retail and institutional bitcoin flows balanced out in Q1, says JPMorgan

Institutional and retail bitcoin flows balanced out in the first quarter of 2021, according to an analysis by JPMorgan. 

The investment bank, which tracks retail bitcoin flows via proxies Square and PayPal and institutional flows via CME Group's bitcoin futures market, said that retail "saw a big acceleration in the current quarter relative to the previous quarter while the institutional flow was flattish."

"In other words, in bitcoin terms, while the bitcoin flow picture was dominated by institutional investors during Q4 2020, the flow picture has been more equally balanced between retail and institutional investors in the current quarter echoing Q3 2020," the bank explained. 

JPMorgan defines the "flow" as purchases from these sources, reflecting activity from services that cater to the institutional and retail investor bases. This data provides a measure of activity from these two channels.

According to the data, itBit daily volumes (which the bank uses as a proxy for PayPal) nearly doubled between Q4 2020 and Q1 2021. Meanwhile, bitcoin payments facilitated by Square also doubled. Its indicator for CME Group only inched up slightly from 1,284 to 1,449.

Still, institutional purchases surged between Q4'20 and Q1'21, as illustrated in the below chart.