Bitcoin is growing without mass hype. When everyone starts talking about cryptocurrency

Experts compared the hype around Bitcoin in 2017 and 2021.

Experts talked about increased interest from retail investors in bitcoin and what affects the influx of a wide audience into the cryptocurrency market.

Retail investors are gradually returning to the cryptocurrency market, Bloomberg writes. The publication noted an increase in commissions on the leading American cryptocurrency exchange Coinbase by 60% in the fourth quarter of 2023. Also, there is a significant increase in trading volumes on the Robinhood brokerage platform, oriented towards retail clients, where cryptocurrency transaction volumes have grown by 242% over the year.

The price of bitcoin (BTC) on February 15 exceeded the $52,000 mark for the first time since November 2021. The total market capitalization of cryptocurrencies has almost reached $2 trillion.

Retail investor activity is still below the levels preceding previous phases of cryptocurrency market growth.

Google search statistics for the word bitcoin indicate that a sharp surge in interest in the cryptocurrency market was noticed after the successful launch of bitcoin exchange-traded funds (ETFs) in January. The subsequent period is characterized by a return to levels typical of a bearish period in the crypto market. The number of installations of cryptocurrency mobile applications also remains at levels characteristic of a market downturn, Bloomberg noted.

We are now only witnessing the beginning of hype, which this time started slightly earlier thanks to the launch of spot bitcoin ETFs, believes the co-founder of ENCRY Foundation, Roman Nekrasov. The demand on the scale of 2017 and 2021 will come after the halving, the effect of which manifests itself for 12-18 months after the event.

In the US, ETFs for bitcoin were allowed for the first time. What does this mean

"The share of institutional players after the launch of spot bitcoin ETFs has increased, but, according to statistics, investors operating with sums of less than $100,000 still dominate the market," noted Nekrasov. "The crypto market still has a high share of retail investors who are more susceptible to fear of missing out and whose emotionality partly explains the volatility of cryptocurrencies," he emphasized.

Nekrasov associates the growth of the cryptocurrency market with the activity of institutional players, but he explains reaching highs and high volatility with the significant participation of retail investors.

There is indeed high demand for cryptocurrency from American investors now, notes the CEO of the Cheelee service, Ruslan Sharov. He cites data from the analytical company CryptoQuant, showing the price difference of bitcoin on the Coinbase exchange and on Binance. On February 15, the Coinbase Premium Index reached a value of 0.12, which may indicate a significant influx of American investors on Coinbase.

Sharov explains investor activity as both the launch of bitcoin ETFs, which have simplified access to cryptocurrency investment for more conservative investors, and anticipation of the upcoming bitcoin halving, which historically precedes cryptocurrency rallies.

"There is hype around the cryptocurrency market comparable to the scales of 2017 and 2021. If in 2017 the initial coin offering (ICO) became a catalyst for rapid growth, then in 2021, the cryptocurrency market revived again due to NFT technology and decentralized finance (DeFi). These catalysts led to the emergence of new cryptocurrency instruments, which revitalized the market and attracted new investors to the cryptocurrency market," summarized the expert.