Crypto: Bitcoin driven by whales while small investors step aside

For years, Bitcoin has occupied a central place among cryptocurrencies. As it evolves, intriguing trends emerge. Currently, Bitcoin appears to be driven by whales while small investors stay away. What does this dynamic mean for the future of Bitcoin?

Bitcoin Whales in Action

Recent data from IntoTheBlock, dated July 19, shows that whales — these wealthy investors and institutions holding at least 1,000 BTC — are rapidly accumulating bitcoins. This buying frenzy has pushed the number of addresses held by these whales to its highest level in two years. But why this sudden enthusiasm?

On one hand, this massive accumulation of bitcoins reflects an unwavering confidence in the long-term prospects of BTC.

Institutional investors and wealthy individuals see BTC as a store of value and a tool for diversifying their portfolios. On the other hand, this trend can be attributed to the optimism surrounding U.S. spot Bitcoin Exchange Traded Funds (ETFs).

Issuers like BlackRock, which holds more than $20 billion in BTC, continue to buy, thus increasing demand and, consequently, prices.

Retail Demand Lagging

Despite the optimism of whales, retail demand for bitcoin is at its lowest level in three years.

This situation may seem paradoxical, especially given the growing support for cryptocurrencies, notably from influential political figures like Donald Trump. So why are small investors staying away?

Several factors can explain this reluctance. Firstly, the price volatility of bitcoin can discourage small investors, who prefer less risky assets.

Secondly, recent scandals and collapses of certain cryptocurrency platforms have eroded consumer confidence. Lastly, increasingly stringent regulations in various countries can also curb the enthusiasm of retail investors.

Yet, history shows that major Bitcoin surges have often been preceded by an increase in retail investor activity. If this trend holds, a resurgence in retail demand could propel Bitcoin to new heights.

The Role of Political Factors

The evolution of Bitcoin depends not only on market dynamics but also on the political arena. In the United States, Donald Trump’s electoral campaign adds an extra dimension. 

Trump, who recently changed his opinion on cryptocurrencies, envisions making the United States a central hub for Bitcoin mining. Moreover, there are rumors that his administration might consider Bitcoin as a strategic asset.

If these policies are implemented, they could have a domino effect, prompting other countries to follow suit and adopt similar measures. Such a development could transform the global cryptocurrency landscape, strengthening Bitcoin’s position as a benchmark asset.

Bitcoin is going through a fascinating period, marked by strong whale accumulation and weak retail demand. This situation raises questions about the future of this iconic crypto.