Bitcoin Surges 118% But Retail Interest Fades

Bitcoin has recently reached unprecedented heights, with its price soaring above $118,000. However, this remarkable surge has not translated into a corresponding increase in retail investor interest. André Dragosz, Bitwise's head of research in Europe, noted that retail investors are "barely visible" in the current market dynamics. This observation is supported by a decline in Google search interest for the term "bitcoin," which reached a level of 40 during the week of July 6–12. Although this figure has risen amid the rally, it remains significantly lower than the peak of 100 points recorded in November 2024, just before bitcoin surpassed $100,000.

Dragosz attributed the recent rebound in bitcoin's price to institutional investors, citing significant inflows into exchange-traded funds (ETFs). On July 10 and 11, U.S. spot bitcoin ETFs attracted $1.18 billion and $1.03 billion, respectively, bringing cumulative inflows to a record $52.36 billion. Ethereum funds also recorded substantial inflows, with the all-time total now exceeding $5.3 billion. Some industry participants suggest that the high price of bitcoin may be deterring regular investors. Digital asset advocate Lindsey Stamp noted that many retail traders might feel they have missed their chance to invest in bitcoin, given its current high value.

Cedric Yangelman, host of the Bitcoin Matrix podcast, expressed skepticism about a near-term revival of retail interest in bitcoin. He believes that bitcoin may not attract retail investors for an extended period. According to Xapo Bank CEO Seamus Rocca, market cycles of new all-time highs followed by deep corrections remain consistent. He warned of the risk of a prolonged bear market, which could be triggered by simple factors such as a general slowdown in news, negative developments, or planned rebalancing of portfolios. Rocca emphasized that bitcoin's correlation with traditional financial markets, such as the S&P 500 index, remains strong, indicating that it is still a risky asset.

Rocca also highlighted the potential "contagion effect" that could drain all the news from the market, leading the crypto sector to "exhaust its potential" in a natural and lengthy process. He disagreed with the notion that institutionalization has eliminated bitcoin's cyclical nature, stating that the market cycles are still very much alive. The lack of public interest in Bitcoin's price surge could also be attributed to the fact that the cryptocurrency has been in the public eye for several years now, and its price movements have become less of a novelty. Additionally, the increasing institutional adoption of Bitcoin may be contributing to the lack of public interest, as large investors and corporations are more likely to be driving the price rally than individual retail investors.

The data from Google Trends also suggests that the current price rally may be more sustainable than previous ones, as it is not being driven by a wave of new investors or speculators. This is because a lack of public interest in Bitcoin's price surge could indicate that the current rally is being driven by more stable and long-term investors, rather than short-term speculators. The lack of public interest in Bitcoin's price surge could also have implications for the broader cryptocurrency market, as it suggests that the current rally may not be a bubble that is about to burst. This is because a lack of public interest in Bitcoin's price surge could indicate that the current rally is being driven by more stable and long-term investors, rather than short-term speculators.