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Vanda Research Notes Retail Capital Shift From Cryptocurrencies to Event Contracts

Individual traders are increasingly rotating funds away from crypto and equities into outcome-based contracts, according to research from Vanda.

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Retail investors are directing capital and attention away from cryptocurrencies toward event-contract platforms, according to Eric Liu, co-founder of retail flow tracker Vanda Research. Speaking on a Charles Schwab podcast, Liu observed that retail participation in crypto and stocks has moved inversely to platforms offering contracts on events such as Federal Reserve interest rate decisions.

While Liu noted that the concurrent timing does not necessarily prove causation, recent market performance reflects a heavier toll on retail-dominated tokens. Over the twelve months ending October 4, Dogecoin dropped roughly 63% and XRP declined about 50%, compared to a 30% slide in Bitcoin, 40% in Ethereum, and 47% in Solana.

The piece points out that Bitcoin's relatively smaller drawdown may stem from institutional support, with U.S. spot Bitcoin ETFs holding roughly 1.29 million BTC. In contrast, tokens like Dogecoin remain predominantly dependent on individual retail traders, leaving them more exposed as retail participation shifts.

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