Bitcoin (BTC) continues to show strong momentum even after a big rally. Key data suggests this trend may have been driven by smart money in recent months. This means that private or ordinary investors have been largely on the sidelines as BTC surpasses $ 15,000 this month.
In 2017, when the bitcoin price reached a full-time high of $ 20,000, retail demand was at its peak. Google Trends data rose sharply, mainstream media coverage increased significantly, and spot volumes increased in large markets, especially South Korea and Japan.
This time, Google Trends’ interest in the keyword Bitcoin was relatively low, while online data shows that smart money is accumulating BTC.
Rich investors buy bitcoins
Moreover, according to network analyst Willie Wu, most of the wealthy investors were the ones who bought bitcoins.
When whales buy bitcoin, they basically facilitate transactions through the OTC market. Over time, the spot markets and derivatives follow the OTC market as whales lead the rally. Woo sa:
“Who bought this pool? It’s smart money … the high income earners. You can see how the average transaction value among investors is rising sharply. OTC offices see this too. Bitcoin is still in the latent stage of its bullish movement.”
The trend for whales to bypass retail investors is bullish, as it appears that Bitcoin is still in the early stages of its bullish phase. The big capital from retail and new investors did not enter the cryptocurrency market.
Another Glassnode account shows a similar trend. The number of Bitcoin addresses containing more than 100 BTC reached a seven-month high of 16,271.
The number of addresses that contain more than 100 BTC. Source: Glassnode
New money is pouring in
Whales that have been buying bitcoin consistently in recent months are in themselves a rookie. But Wu stressed that the number of new whales has also increased.
If the number of addresses containing large amounts of bitcoin increases, analysts see it as a general increase in new whales.
The increase in the number of high net worth individuals acquiring bitcoin coincides with the recent outbreak of institutional frenzy surrounding BTC.
After the acquisition of Square BTC for $ 50 million USD, the number of wealthy investors in the Bitcoin market increased dramatically. Wu explained:
“Best of all, we’re not just seeing an influx of smart money, it’s new smart money. The orange line is the hourly rate of new investors entering the hour, as seen earlier on the blockchain. That’s very optimistic.”
Google Trends data shows relatively low interest in retail
Google Trends data refers to the same data points on the web. The search volume for the keyword “Bitcoin” is currently less than 10% compared to its peak in 2017.
But while the bitcoin search volume remains low, states such as Hawaii, California, Nevada and Washington are particularly interested.
Interestingly, California and Hawaii ranked third and fourth in terms of per capita income by state in 2020.
Moreover, San Jose / San Francisco in California, i.e. Silicon Valley, is ranked as the most important metropolitan area in terms of interest in Bitcoin. Silicon Valley is of course home to many wealthy investors and businessmen.