- Retail investors are still wary of the crypto industry despite Bitcoin’s return to relevance.
- Institutional players are largely behind the current market rally, as ETF inflows break records.
- Several key social metrics are lagging behind 2021 highs, including YouTube views and Google Trends.
- Some analysts believe the money locked up in crypto ETFs means that altcoin growth will be slower than in previous bull cycles.
Bitcoin is on a roll of late. With the original cryptocurrency fast approaching all-time highs, many believe the bull run is already well underway. Although that may be the case, there’s been a significant difference between the current rally and those of years past. What’s the difference?
The absence of retail investors.
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Important Metrics Still Lagging Well Behind 2021 Highs
Institutional investors are the big fish in the financial world. But for years, they avoided the crypto market like the plague, citing murky value and volatility as reasons to steer clear. However, things have changed substantially after the introduction of spot ETFs. With Bitcoin becoming increasingly recognised as a legitimate, long-term asset, institutions like BlackRock and Fidelity have changed tack and started rushing into the sector.
Large-cap financial businesses are market drivers, and at face value have greater influence over the price of digital currencies than their retail counterparts. However, the crypto market is often driven by hype, media coverage and FOMO. And who’s the key to these metrics? Retail investors.
According to prominent crypto analyst Miles Deutscher, retail investors are still keeping their distance from the market, likely still scarred by the FTX collapse in 2022 and gloomy media exposure. There are several key metrics that prove this.
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For example, YouTube is the home of thousands of useful (and not so useful) crypto news, analysis and discussion channels. Despite Bitcoin’s excellent year-to-date, interest in crypto videos is down significantly since 2021. At the height of BTC’s previous all-time high, daily YouTube views for popular channels were easily surpassing the 2.5M mark. As of January 2024, most channels are struggling to break the 750K mark.
Other social metrics back this argument. Google trends demonstrates that searches for terms like “Bitcoin” and “crypto” are trailing their 2021 highs. Additionally, prominent exchange apps are yet to chart on Google Play/Apple App Store, whereas in 2021 they were consistently ranking in the top 10.
Interestingly, Deutscher suggests that we are still in the BTC dominance part of the cycle, which tends to precede an altcoin (and retail) explosion. Some are suggesting that this time may be different though, with a bull run less focussed on altcoins compared to previous big trends. The rationale behind this is the mass amounts of money locked up in ETFs, meaning that investors can’t “relocate into altcoins”. Naturally, until the SEC approves further crypto funds – which may never come to fruition – a more subdued altcoin season may be on the menu for 2024.
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