Small Bitcoin 
$64,624 holders, colloquially known as “shrimps” in the crypto world, are drawing attention due to their significantly reduced activity on the blockchain. Although this behavior initially seems reminiscent of the FTX collapse era, a CryptoQuant analyst argues that there is a misunderstanding in interpreting this current scenario. While the situation parallels the days of the FTX crash, the conditions today warrant a different assessment.
The Shrimp Phenomenon
Bitcoin investors possessing less than 1 BTC are commonly referred to as “shrimps.” The activity level of this group has recently hit an all-time low, previously regarded as a bottom signal for cryptocurrencies. Under normal circumstances, this would be considered a strong indicator of a market bottom.
An analyst known as Darkfost shared a graph illustrating this trend:
“In the graph, this behavior is measured by the Bitcoin inflows to Binance, illustrated with a 30-day moving average to correct for noise and short-term volatility. In December 2022, at the end of the post-FTX panic, these small investors were still sending about 2675 BTC to Binance. Today, these flows have dropped to just 411 BTC, reaching one of the lowest levels ever observed. This is not just a simple pullback but a structural decline.
Historically, these individual investors tend to become more active when the market trends upward. For instance, during the 2020-2021 rally, they flocked to exchanges as prices rose. However, in this cycle, the opposite is happening. Bitcoin is on the rise, yet small investors are less visible on exchanges. Their absence is striking compared to previous cycles.”
Changing Dynamics Among Individual Investors
What accounts for this change? Darkfost suggests that the introduction of spot BTC ETFs in early 2024 plays a significant role. Since then, small investors’ entries to Binance have decreased from 1056 BTC to 411 BTC, a 60% reduction. This indicates that ETFs are serving their purpose, providing a way to hold Bitcoin without the hassles of private keys, wallet security, exchange accounts, or custody risks. Consequently, ETFs have seen tens of billions of dollars in net inflows driven by this motivation.
The new all-time low reflecting the radical shift in individual investors’ market participation should be understood within this framework. Has their appetite diminished?
“This does not imply that small investors’ interest has waned. Instead, it may reflect a more mature stance. Many may favor long-term positions that can strengthen Bitcoin’s market structure rather than tracking short-term price movements through exchanges.”
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