(Bloomberg) — A relentless wave of optimism is sweeping the nearly $4 trillion crypto market, driven by a frenzy of Washington policy moves accelerating its assimilation into regulated finance. The passage of a landmark stablecoin law and broader legislative momentum have injected new legitimacy into the sector, lifting prices and rekindling risk appetite across digital assets.
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Signs of retail re-engagement are resurfacing. Coinbase’s app surged to fifth place in Apple’s Finance category, up from 25th a month earlier, according to data tracker Sensor Tower. Google searches for “Bitcoin” are climbing. Telegram groups and Discord forums saw spirited activity during Washington’s “Crypto Week,” a highly choreographed policy blitz that culminated in President Donald Trump signing the first major US stablecoin framework into law.
That spike in visibility, however, belies a more complex picture of who’s actually driving flows.
While consumer interest is returning, the rally’s architecture is distinctly institutional. Large private holders — those controlling 10,000 Bitcoin or more — acquired roughly 47,000 tokens ahead of Bitcoin’s all-time high of about $123,000 on July 14, 10x Research data show. Since then, these substantial holders have begun to unwind positions, contributing to a pullback to around $118,600. Much of the re-engagement started about a month ago, after stablecoin issuer Circle Internet Group Inc.’s blockbuster June initial public offering, according to Chris Rhine, head of liquid active strategies at Galaxy Digital.
“It’s encouraged all investors to get re-engaged— small retail to large institutions,” Rhine said. “We have institutions calling us now, asking how to position around stablecoins. The sense of urgency is there.” That urgency, however, is not translating into core retail metrics yet — at least as it comes to quarterly results. Coinbase Global Inc., which reports on July 31, likely saw its second-quarter trading volumes fall 44% from the previous quarter and 3% year-on-year, according to Oppenheimer & Co. Wallet app downloads for the exchange’s recently re-named other main app, Coinbase Wallet, dropped 51% quarter-on-quarter, with similar declines observed across other major exchanges, according to Sensor Tower.
Much of the speculative attention once directed at tokens has shifted elsewhere. Analysts note retail investors have pivoted towards AI-linked equities and crypto-adjacent names such as Strategy, where volatility and narrative appeal remain high. Some retail participants have exited the market entirely, citing macroeconomic concerns and “Liberation Day” tariffs, said Oppenheimer analyst Owen Lau.