Bitcoin Retail Investor Demand Hits a Three-Year Low; Is the Bull Run Over?

After soaring above $73,000 in March due to high investor demand following the spot BTC ETF launch in January, Bitcoin dipped below $55,00 in early July. This slump coincided with reduced Bitcoin ETFs inflow amid bearish investor sentiment and massive sell-offs by Germany.

However, Bitcoin has regained momentum, soaring above the $60,000 psychological level to trade around $64,000. Even the spot BTC ETF inflows have picked up, suggesting renewed institutional interest.

Despite this improvement, retail investor demand remains low, and Google search interest for BTC dwindled by 57% since March. According to an X post by CryptoQuant CEO founder and CEO Ki Young Ju, Bitcoin retail investor demand hit a 3-year low.

#Bitcoin retail investor demand is at a 3-year low.

It's measured by the 30-day change in total transfer volume for transactions under $10K.

h/t @AxelAdlerJr pic.twitter.com/GnosvQUa7G

- Ki Young Ju (@ki_young_ju) July 18, 2024

Bitcoin Retail Demand Dwindles

For context, Bitcoin retail investor demand measures the interest of retail investors in Bitcoin. According to Young Ju's post, this metric has hit its lowest level in the last three years.

Young Ju based his assertion on the average 30-day change in total transfer volume for Bitcoin transactions below $10,000. According to his post, the average change in Bitcoin demand among retail investors has dropped below -15% in the last 30 days.

Analysts say retail investor interest needs to rebound before the real Bitcoin bull run can start.

Institutions often execute a larger volume of Bitcoin transactions, which undoubtedly impacts the price of BTC. However, many experts believe a surge in retail investor interest drives the real Bitcoin price rallies.

Minkyu Woo, a CryptoQuant contributor, says the real bull run typically starts with massive buying pressure from retail investors. An increase in retail investors enhances market sentiment, and Woo believes this market-moving volume from retail investors is yet to be seen.

However, VanEck CEO Jan Van Eck mentioned in April that most inflows into the US spot BTC ETFs are possibly from retail investors.

Moreover, reacting to Ki Young Ju's post, an X user, Ms Mogul, presumably in Australia, said retail investors are buying through ETFs. According to the user, every retail buyer they know wants to buy through ETFs since Australia doesn't allow cash transfers from banks to crypto exchanges.

Retail is buying through the ETFs tho? Every retail buyer I know wants to buy this way because in Australia we can't send our own money from our bank account to a crypto exchange. Does the graph factor this?

- Ms Mogul (@theLLPtweets) July 18, 2024

Besides the reduced retail demand, search interest for BTC has also declined by 44% in the last three months after the halving event. According to Google Trends data, search scores for Bitcoin dropped by nearly 57% to 43 since March after BTC reached its all-time high of $73,750.

Spot Bitcoin ETFs Record Positive Flow Amid Low Retail Demand

Amid the dwindling retail investor interest, spot BTC ETFs have recorded substantial inflow since July 5, following two consecutive days of outflows. Surprisingly, this coincided with Bitcoin's drop to a five-month low of $53,600 on July 5.

Data from Farside Investors shows the 11 spot BTC ETFs recorded a net inflow of $422.5 million on July 16, the largest volume since June 5.

However, the net inflow for July 17 was $53.3 million, an 87% decline from the previous day's value. As of July 18, the 11 spot Bitcoin ETFs recorded $84.8 million in net inflows, suggesting a slight increase.

Despite the prevailing volatility, with consistent up and down swings, Bitcoin's price remains capped above $64,000.

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