Bitcoin Reaches New Highs Due to Institutional Demand

Bitcoin has recently hit a new high early in this cycle, surpassing previous peaks before the expected halving. The surge in price is mainly due to institutional demand, signaling a positive outlook for the cryptocurrency. Transactions have also spiked this year, reaching new highs amidst the excitement surrounding ordinals and Runes, indicating a growing interest in Bitcoin.
Analysts are perplexed by the current state of Bitcoin. Let’s delve into it.
Initially, Bitcoin’s price has reached a new high early in this cycle, exceeding previous peaks due to institutional demand.
On the surface, this may seem promising…
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— IntoTheBlock (@intotheblock)
June 18, 2024
Institutional investors are heavily involved, and Bitcoin network activity is thriving. These factors typically suggest a strong market and positive sentiment. However, the situation is more complex than it appears. Despite the optimistic signs, analysts are confused by Bitcoin’s current position. The confusion stems from a crucial piece of information: the surge in usage and institutional activity does not involve a significant influx of new participants.
Decrease in New Bitcoin Users
The number of new Bitcoin users has dropped to a multi-year low, even falling below levels seen during the 2018 bear market. 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 retail investors investing in Bitcoin? Typically, widespread excitement among retail investors drives crypto bull markets. Despite Bitcoin’s early success in this cycle, the absence of retail participation is a significant anomaly that analysts are struggling to comprehend.
Bitcoin’s early price surge and increased network activity, fueled by institutional demand, present a promising scenario. However, the decrease in new user growth and lack of enthusiasm from retail investors pose a critical puzzle for analysts, casting uncertainty on the future path of Bitcoin.