The price of Bitcoin has been fluctuating for several months, rising from under $20,000 to over $50,000 since June 2023.
While this is largely due to the anticipation and subsequent approval of nearly a dozen spot Bitcoin ETFs in the US, it appears that retail traders are still absent, raising questions as to whether their arrival will trigger a further price increase for the asset could trigger in the US next few months.
How did we get here?
Data from Google Trends shows the typical behavior of retail investors as they are more likely to search for very popular investment options. This causes them to enter the market in question, which is known as FOMO (fear of missing out).
The cryptocurrency market is perhaps best known for such sentiment swings, as it tends to overheat very quickly when demand from such investors skyrockets. This, in turn, causes prices to rise before the inevitable correction and market cooldown.
The last such cycle occurred in 2021, when prices boomed and retail crowds were ubiquitous. Laser-Eyes appeared on Twitter and promised $100,000 per BTC in the next few months. That didn't happen; BTC lost value and retail investors disappeared.
Bitcoin began rallying in June 2023 when BlackRock filed to launch its own spot BTC ETF. Given the company's overwhelming success rate in ETFs, institutions started paying more attention to Bitcoin and the general expectation changed from “The SEC will never approve spot BTC ETFs” to “It's a matter of when, not if.” “
This change led to growing hype and subsequently rising prices, with BTC rising from under $20,000 in June 2023 to over $40,000 in early January. Then came the actual approvals of 11 spot BTC ETFs, the inevitable sell-out moment before the cryptocurrency went back on the offensive, rising above $50,000 for the first time in more than two years on the back of actual demand for these financial products.
But one thing still seems to be missing.
Where is the retail?
As large investors and institutions appear to be chasing Bitcoin with large purchases, reports are frequently emerging that smaller holders (sharks and shrimps) have dumped their BTC stash. Google Trends data shows something similar, as global requests for Bitcoin are a long way from the 2017 boom, the 2021 bull market, and even the 2022 industry crashes.
Aside from a brief spike around ETF approvals in mid-January, searches have barely surpassed the bear market of 2019 and the Covid-induced correction of 2020.
Bitcoin Google Searches Worldwide. Source: Google Trends
This just goes to show that retail investors haven't really caught on yet, even though the price of BTC has more than doubled since last June. However, given Bitcoin's price performance following the previous halvings, this could all change.
Therefore, it would be interesting to track whether the retail industry is behind another surge that will lead to a new all-time high for Bitcoin in the next few months.
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