[PORTLAND] While the arrival of institutional demand is one of the most cited reasons by cryptocurrency proponents for this year's rally, the head of the world's largest online exchange says individual investors are still playing a key role in driving the dramatic price gains.

"We have not seen institutions growing faster," said Zhao "CZ" Changpeng, the chief executive of Malta-based Binance.

"What we've seen is pickup in both places. The number of institutions coming into this industry has not increased that tremendously in 2019 yet."

While both institutional and retail trading is growing at Binance, individual investors account for about 60 per cent of trading volume -- about the same percentage as last year, Mr Zhao said.

That is even as companies like Facebook and JPMorgan Chase & Co have announced major digital coin efforts, which are expected to push more companies and funds to give cryptocurrencies a closer look.

This growth comes in part thanks to greater availability of margin trading. On July 11, Binance began allowing all traders to borrow up to three times the amount of money they put down, and 10,000 traders signed up on the first day, borrowing US$15 million in funds, Mr Zhao said.

Another large exchange, Bitfinex, recently allowed traders to borrow up to 100 times their deposits on certain products. Armed with more funds to speculate with, traders have driven bitcoin's price up 36 per cent since the beginning of June.

"I would say the majority of people by the end of the year will be using margin in some capacity," Mr Zhao said in a phone interview.

"It's quite safe to use to be honest. There will be more trading volume and potentially higher volatility."

BLOOMBERG