Bitcoin has recently achieved a new high early in its current cycle, surpassing previous peaks before the much-anticipated halving event. This surge in value is primarily fueled by institutional interest, hinting at a positive future for the cryptocurrency. Earlier this year, transaction volumes soared to record levels amidst excitement about ordinals and Runes. This uptick in activity indicates a growing and sturdy interest in Bitcoin.
Numerous analysts are scratching their heads over Bitcoin’s current situation. Let’s dig deeper.
To start, Bitcoin’s value has reached a new high in its cycle, driven by institutional demand and surpassing previous peaks before the halving event. At first glance, this might seem…
Institutional investors are playing a significant role, and Bitcoin network activity is bustling. These factors typically signal a robust market and bullish sentiment. However, things are not as simple as they appear. Despite the positive signs, many analysts are puzzled by Bitcoin’s current state. The confusion stems from a crucial detail: the surge in activity and the presence of institutional investors do not involve a notable influx of new participants.
Drop in New Bitcoin Users
The number of new Bitcoin users has plummeted to levels not seen in years, even dropping below the figures from the bear market of 2018. This decline is worrisome, as new user growth usually drives crypto bull markets.
The current lack of growth in retail users raises an important question: Why aren’t individual investors jumping on the Bitcoin bandwagon? Typically, widespread excitement among retail investors propels crypto bull markets. Despite Bitcoin’s early surge in this cycle, the absence of retail involvement is a significant anomaly that analysts are struggling to comprehend.
Bitcoin’s early price increase and heightened network activity, fueled by institutional demand, present an optimistic outlook. However, the drop in new user growth and the lack of enthusiasm from retail investors pose a challenging puzzle for analysts, casting uncertainty on Bitcoin’s future trajectory.