Crypto Market Sentiment: Massive Disconnect Between Retail and Professional Investors, Says Bitwise CIO

The cryptocurrency market is witnessing a significant gap in sentiment between retail investors and professional players, according to Matt Hougan, the Chief Investment Officer (CIO) at Bitwise. While experienced crypto investors remain bullish on the market’s long-term prospects, retail sentiment is at its lowest point in years, highlighting a stark contrast in perspectives.
Retail Sentiment Hits Rock Bottom
Hougan described the current market sentiment as an “absolutely massive disconnect” between retail and professional investors. In a February 7 post on X (formerly Twitter), he stated, “Retail sentiment is the worst it’s been in years, while professional investors are extraordinarily bullish. It’s like living in two completely separate worlds.”
This sentiment is reflected in the Crypto Fear and Greed Index, which currently sits at a "Fear" score of 44, down 25 points from last month's "Greed" score of 69. The Fear and Greed Index is a widely-used tool that measures market sentiment, with lower scores indicating fear and uncertainty, while higher scores reflect greed and market optimism.
Altcoins and Memecoins Struggling
The decline in retail sentiment can largely be attributed to the underperformance of many altcoins and memecoins, which make up a significant portion of retail investor portfolios. Notably, the three largest memecoins by market capitalization—Pepe (PEPE), Shiba Inu (SHIB), and Dogecoin (DOGE)—have seen steep losses in recent days.
- Pepe (PEPE) has dropped 35.31% over the past week
- Shiba Inu (SHIB) is down 20.82%
- Dogecoin (DOGE) has fallen 24.69%
Bloomberg ETF analyst James Seyffart pointed out that the poor performance of these assets is a major contributor to the low retail sentiment. He noted that retail investors are "holding a ton of altcoins and memecoins" that are currently experiencing significant declines.
Pseudonymous crypto trader DFarmer also remarked on the severity of the situation, stating, “I don’t think I remember an extended alt bloodbath this bad ever.”
Diverging Sentiment: Retail vs. Professional
The disconnect between retail and professional sentiment is further highlighted by analysts’ observations of specific tokens. DeFi expert DeFi Dad noted that retail sentiment for Solana (SOL) is "a little more bullish than professionals," while the sentiment for Ether (ETH) is the opposite—retail sentiment for Ethereum is at its lowest ever, while professional sentiment remains more optimistic.
Solana has recently seen increased interest from memecoin traders, which has contributed to a boost in retail sentiment toward the network. On the other hand, Ethereum has been favored by institutional investors, including those linked to U.S. President Donald Trump’s DeFi project, World Liberty Financial, further attracting the attention of professional investors.
Macro Events Affecting the Crypto Market
The broader market has also been impacted by macroeconomic events. Donald Trump’s presidential win in November 2024 triggered a significant rally in the crypto market, pushing Bitcoin (BTC) to $100,000 for the first time. However, recent policy moves, such as Trump’s tariffs on Canada, Mexico, and China, have shaken the market, leading to the largest crypto liquidation event in history.
While Trump later paused the planned tariffs after negotiations, Bitcoin’s price remains below the key psychological level of $100,000. As of publication, Bitcoin is trading at $96,609, reflecting the ongoing market uncertainty.
Outlook for the Market
The contrasting views of retail and professional investors underscore the current volatility and uncertainty in the crypto market. While professionals remain optimistic about the future, especially in the face of institutional adoption and long-term potential, retail sentiment is heavily influenced by the short-term performance of altcoins and memecoins.
As macroeconomic events continue to play a role in shaping the market, the crypto community will be closely watching how these diverging sentiments evolve. With Bitcoin still trading below the $100,000 mark and the broader market experiencing turbulence, the question remains: will retail investors regain confidence, or will professionals continue to dominate the market’s outlook in the months ahead?
Disclaimer: The content on this website is for informational purposes only and does not constitute financial or investment advice. We do not endorse any project or product. Readers should conduct their own research and assume full responsibility for their decisions. We are not liable for any loss or damage arising from reliance on the information provided. Crypto investments carry risks.