Retail Investors Hold Back as Bitcoin Nears Record Levels

Bitcoin Approaches New Highs as Retail Interest Stays Low

Retail interest in Bitcoin is extremely low, despite the fact that its price is on the verge of reaching a new all-time high. The gap between growing prices and retail activity has been seen by numerous observers, including Bitcoin expert Miles Deutscher. Deutscher recently posted on X that Bitcoin was “on the verge of breaking all-time highs” with minimal engagement from retail investors.

On October 29, Bitcoin nearly hit a record high, briefly touching $73,562 before settling to around $72,300, based on CoinGecko data. Although this high demonstrates the robustness of the Bitcoin price, retail investors have not been as excited by it as they have been during previous bull runs. Interest in the keyword “Bitcoin” only received a score of 23 out of 100, according to Google Trends, compared to late May 2021, when search volume peaked.

Other topics, like artificial intelligence, have garnered more attention than the recent spike in the price of Bitcoin.  Google search traffic for AI significantly outpaces Bitcoin, reflecting a shift in public interest. Historically, retail interest has spiked during Bitcoin rallies, often pushing crypto apps, like Coinbase, to the top ranks in app stores. Currently, Coinbase stands far from these previous highs, ranking 308th in Apple’s App Store, per Sensor Tower data.

Despite low interest overall, Coinbase has shown some signs of activity, jumping 167 positions between October 28 and 29. This uptick might suggest a gradual return of retail investors as Bitcoin’s price gains traction. However, crypto analytics firm CryptoQuant reports that while there is some retail engagement, large investors have taken the lead throughout 2024.

Source: CryptoQuant

CryptoQuant data also shows that daily Bitcoin transfers by retail investors hit their lowest level since 2020, with $326 million in transactions recorded on September 21. Analysts at CryptoQuant suggest that this low retail activity could signal an upcoming price rally, as retail investors often move quickly to catch up if Bitcoin makes a sudden leap.

Institutional investors have shown far greater demand for Bitcoin than retail investors, especially in the last 12 months. CryptoQuant’s founder and CEO, Ki Young Ju, highlighted that custodial wallets for institutions have seen twice the activity compared to retail wallets. A significant factor in this increase is the introduction of United States spot Bitcoin exchange-traded funds, or ETFs. According to data from Farside, these ETFs have driven over $22.7 billion in net flows since their launch in January.

Bitcoin’s rising price reflects renewed interest among institutions, yet retail investors are holding back. Search trends, app rankings, and transfer data all indicate that individual investors haven’t jumped back into Bitcoin with the enthusiasm seen in past bull runs. As institutional demand continues to grow, especially through vehicles like ETFs, retail investors may gradually catch up in the future as Bitcoin potentially achieves new highs.