Alex Leishman: Institutions Are Buying What Retail Sells — Plus How to Keep Your Bitcoin Safe

**Alex Leishman** (0:00)
Retail is overall selling Bitcoin, and institutions are buying them. Over the last decade, the institutional ownership has started to accelerate.

**Natalie Brunell** (0:08)
Does that worry you a little bit?

**Alex Leishman** (0:09)
I do think that it does mean that Bitcoin is entering a new era. The good news, though, they know that Bitcoin succeeding is contingent on it continuing to remain decentralized. They know that if they try and make Bitcoin Wall Street coin, that actually is counterproductive to what they want to. That said, we are in a bear market.

**Natalie Brunell** (0:29)
Do you think that we have still a little bit more pain to go because we're only about nine months in right now and the previous bear markets have lasted a year or more?
Hey, everyone. Welcome back to the show. Joining me this week in New York City is Alex Leishman. He is the founder and CEO of River. And I'm proud to say I bank at River. So Alex, great to see you.

**Alex Leishman** (0:54)
Great to be on the show.

**Natalie Brunell** (0:55)
Let's talk a little bit about investor behavior during this bear market. What are you seeing in terms of are people holding through the price challenges? Are people capitulating maybe at the bottom? What can you tell us?

**Alex Leishman** (1:08)
Well, people are definitely holding. We've seen the vast majority of clients not sell any Bitcoin. And Net, the River client base in the last quarter, which has been the worst quarter in the market in a number of years, still saw Net buying. So, overall, the River client base is Net buyers.
That said, we are in a bear market.
We're seeing lower volumes than we've seen in probably about a year and a half. I would say that our volumes are around the peak of the previous bull market. So, as our company has grown, our bear market volumes are higher than the last bear market. But nonetheless, it's still the lowest we've seen in about a year and a half. So, that means that people are holding, but they're not necessarily buying a lot more or making as many big trades.

**Natalie Brunell** (1:55)
You guys have been putting out some great charts and research. And one that really struck me was how Bitcoin ownership changed hands. You did one for Q2 and Q1. In Q2, negative 78,000 for individuals plus 115,000 for businesses. So, what does that tell us?

**Alex Leishman** (2:16)
So, that tells us that retail is net overall beyond the river client based on our estimates, selling Bitcoin and institutions are buying them. Now, it's a little bit, there's a little caveat there, which is that ETFs are also seen as institutional buyers. And so, it could be we're seeing retail investors buying ETFs and that maybe is offsetting people selling Bitcoin, but overall, we're still continuing to see what's more of a macro trend. And we have a chart from a report we put out earlier this year or late last year of over the last decade, the change in ownership of Bitcoin, which in the very early days was basically 100% individuals. And especially in the last few years has started to, the institutional ownership has started to accelerate because there's a fixed supply of Bitcoin.
That means that some Bitcoin or there's just a little bit of Bitcoin being mined these days, that means that a lot of the Bitcoin the institutions are buying are coming from retail sellers. Now, some of those are very early holders that had a lot of Bitcoin and are diversifying a little bit. But also, another way to look at this is to look at the assets that aren't Bitcoin.
A very large percentage of the global assets are held by institutions. So as Bitcoin matures, it's actually expected that the percentage of Bitcoin owned by institutions will also continue to grow. And that's what we're seeing.

**Natalie Brunell** (3:56)
Does that worry you a little bit that people are basically kind of giving up their self-custody or self-sovereign ownership and that institutions are increasingly going to be the holders of most of the coins?

**Alex Leishman** (4:10)
It doesn't worry me, but I do think that it does mean that Bitcoin is entering a new era. And it's something that we're all getting smart about.
And the implications that we need to be very careful of are around governance of Bitcoin, right? Bitcoin has always had this very sort of loose system of, well, who decides things? Well, it's kind of everyone.
But it's also not that simple. Like, you know, who can propose a soft fork or a hard fork to change the rules of the network? Well, you kind of have to have enough political capital to even get momentum, to get people to even pay attention to that. And before institutions were involved, that was just very like human, right? And now there's, it's still human, but there's also really big pools of institutional capital behind some of the humans. And the good news, though, is that Bitcoin has had such a strong culture that the institutions who have bought into Bitcoin do know they're sort of buying into Bitcoin's values. And they know that Bitcoin succeeding is contingent on it continuing to remain decentralized. They know that if they try and make Bitcoin Wall Street coin, that actually is counterproductive to what they want to. So that's the good news. And so we're in an adjustment period, and I think, I think we'll figure that out.