Why Bitcoin Might Be a Victim of Its Own Success
Bitcoin keeps on hitting all-time highs, but retail investors are nowhere to be seen. Why is this… and will they come back?
Bitcoiners are euphoric right now — with fresh all-time highs continually being set as the world’s biggest cryptocurrency blasts through $120,000 for the first time.
Yet despite the celebrations, some analysts and influencers are worried that BTC might have become a victim of its own success. Why? Because retail investors are nowhere to be seen in this current bull run.
As Bitwise’s European head of research André Dragosch recently pointed out, the latest price surge “is mostly driven by institutions” — companies like Strategy and Metaplanet that are hoovering up as many coins as they can afford.
And to powerfully illustrate this point, he shared a chart tracking BTC’s price since 2015 — and how this corresponds to Google search traffic for “Bitcoin.”
It’s pretty staggering. Both have regularly moved in lockstep with one another — rising together during bull runs, and falling whenever there’s a bearish contraction. However, they diverge at two key points. The Google line, in green, jumps sharply higher in late 2017 and early 2018, coinciding with when BTC hit $20,000 for the very first time. Fast forward to now though, and the opposite is happening. Even as Bitcoin’s value reaches unprecedented levels, as shown by the black line, search interest is plunging.
There’s one important caveat worth making here. The rise of artificial intelligence — allowing curious internet users to get customized answers to their questions in a matter of moments — means Google isn’t as popular as it once was. For all we know, a large chunk of this traffic could be flowing into the likes of ChatGPT instead — something we can’t verify because OpenAI doesn’t release information about what’s trending on its platform.
But there’s no denying that, at least for now, everyday investors just aren’t gravitating to Bitcoin like they used to. So… why might this be?
For one, some consumers might be feeling a little cautious. Those with long memories will know that buying around an all-time high can be risky. Anyone who snapped up BTC when it first hit $20,000 in 2017 ended up in the red for three years — with the value of their coins plunging by 67.5% in just six months.
And the same was true back in November 2021, when Bitcoin broke $69,000. Prices had crashed by more than 75% within 12 months, and wouldn’t return to this level for two years or so.Retail or no retail, Bitcoiners are now setting their sights on the next big milestone: $1 million. That remains some way off — and may take a few bull cycles to achieve… if it’s ever reached at all. The likes of JAN3’s Samson Mow point to this target as evidence that we’re still early, and plenty of opportunity for retail investors remains.
