Retail investors could play a larger role in digital asset markets this year as new products, rising prices, and easier access pull crypto closer to the core of U.S. investing. Asset managers, advisors, and consumer groups are watching closely as Main Street tests the waters after years of boom-and-bust cycles and regulatory scrutiny.
It could be the year Main Street’s appetite for cryptocurrency exposure meaningfully grows.
The shift comes after a string of developments that lowered the barrier for everyday investors. U.S. regulators approved spot bitcoin exchange-traded funds in early 2024, allowing exposure through ordinary brokerage accounts. Payment apps added trading features. Some workplace plans explored limited access. Together, these changes are drawing in a new audience that once sat on the sidelines.
How Crypto Reached the Mass Market
Digital assets surged into public view during the 2020–2021 rally, then suffered a sharp downturn in 2022 as major firms failed and prices collapsed. The collapse of several trading platforms and lenders hurt confidence and prompted tougher oversight and lawsuits. The market began to recover through 2023 and into 2024, aided by tighter risk controls at major custodians and clearer rules on some products.
The launch of spot bitcoin ETFs marked a key access point. Investors can now buy and sell exposure inside standard brokerage accounts without handling private keys or using offshore exchanges. Those funds gathered tens of billions of dollars in assets during their first months, signaling strong demand from both institutions and individuals.
Brokerages, banks, and fintech apps also widened crypto services, from simple buy-and-sell features to recurring purchases and tax reports. That convenience, paired with stronger brand names and audited custody, has made first steps into the sector less intimidating for new investors.
Advisors Weigh Allocation and Risk
Financial advisors, once wary of custody and compliance issues, are starting to discuss small allocations with clients who want diversification or a hedge against inflation. Many are setting strict guidelines on position size, rebalancing, and the use of regulated vehicles.
Common practices include:
- Limiting exposure to a low single-digit share of a portfolio.
- Using ETFs in taxable accounts for better liquidity and reporting.
- Avoiding leverage and complex yield products.
Some retirement plan sponsors are exploring optional windows for crypto-linked funds. Others keep them off menus due to volatility and fiduciary concerns. The debate reflects a balancing act between investor demand and duty of care.
Consumer Risks Remain Front and Center
Advocates and regulators continue to warn about sharp price swings, scams, and the risk of loss from hacks or poor security. While ETFs reduce custody risk for investors, they do not remove market risk. Bitcoin’s price has seen large drawdowns in past cycles, and smaller tokens can move even more.
Disclosure, fees, and tax treatment matter too. Expense ratios for crypto funds vary. Frequent trading may trigger taxable events. State and federal rules on staking, yield, and stablecoins remain in flux. Clear, plain-language education is still lacking for many new investors.
Market Drivers to Watch
Several forces could shape retail interest over the next few quarters:
- Price momentum and headline events that attract attention.
- Further product launches, such as more brokerage integrations and model portfolios that include crypto ETFs.
- Regulatory actions that clarify or restrict certain activities.
- Corporate adoption, including balance-sheet holdings or payment trials.
Analysts also point to the maturing derivatives market and deeper liquidity at regulated venues as signs of a steadier market structure. At the same time, global rules are tightening, with Europe implementing new licensing standards and several Asian markets strengthening oversight.
Signals of a Cautious Opening
The current shift is not a rush but a measured step. Investors who sat out earlier waves now have more familiar entry points and clearer guardrails. Advisors have frameworks for sizing and risk. Large issuers have bolstered custody, auditing, and disclosures.
Yet memories of past failures still loom. Many households remain wary, focusing first on emergency savings and core retirement funds. For those considering crypto, experts suggest treating it as a satellite holding, sticking to regulated products, and preparing for volatility.
Retail interest in crypto is gaining traction, guided by safer access, stricter rules, and steady education. The coming months will show whether that interest endures through market swings. Watch for new fund flows, advisor adoption, and regulatory updates. If those pieces hold, Main Street could make crypto a small but lasting part of the standard investing toolkit.
