There has been a fantastic bull run in Bitcoin (BTC) prices in 2024. With prices reaching all-time highs, institutional investors and seasoned traders may finally implement their strategies and reap the rewards of the market’s recovery. Despite this, a large number of individual investors have chosen to remain idly by during the bull market. This article covers what started the 2024 bull run, why regular people didn’t put their money into it, and what we may learn from it.
The 2024 Bitcoin Bull Run
2024 Bitcoin experienced a robust recovery after a difficult bear market in 2022 and 2023. The demand for Bitcoin has been fuelled by various factors, including favourable macroeconomic conditions, clear regulations in major regions, and the expectation of the 2024 Bitcoin halving event. Within a matter of months, prices increased by more than 150%, and Bitcoin surpassed $70,000 for the first time since its 2021 highs.
Rather than retail enthusiasm, institutional adoption was the primary driver of this rise. Smaller private investors were overshadowed by the enormous capital contributions of hedge funds, venture capitalists, and major companies when they entered the market.
BTC experiencing a supply shock?
Bitcoin trading volume has hit a six-year low. Crypto whales have begun transferring their wealth to more secure wallets. Currently, there are only 2.3 million Bitcoins available on exchanges. More and more people are opting to hold their coinage for the long haul. Consumers tend to sell their bitcoin on exchanges when there is a bull run since its value has increased. However, despite the high prices, many are still collecting coins now.
Exchanges do not have access to 19.7 million BTC. Nearly four million of these are either in storage or have been misplaced. After selling, miners still hold 2 million BTC. BlackRock reported 449,965 Bitcoins. Potentially, they may increase their purchases of coins from brokerages. Keeping Bitcoin on your own is becoming more difficult and dangerous. People mainly store Bitcoin Investors as a reserve and for the long term, which is why the number of on-chain transactions is decreasing.
Why Retail Investors Missed Out
Market Timing Challenges
Retail investors often struggle with timing their market entries and exits. After the prolonged crypto winter of 2022-2023, many hesitated to re-enter, fearing further losses. When Bitcoin’s rally gained momentum, prices were significantly higher, deterring late entrants.
Lack of Knowledge and Resources
Institutional players can access advanced market analytics, insider knowledge, and dedicated trading teams. In contrast, many retail investors lack the technical expertise and tools to make informed decisions. The fast-paced nature of the 2024 rally left many unable to react effectively.
Fear of Regulation
Despite some regulatory clarity, retail investors remained cautious due to ongoing uncertainty in certain jurisdictions. Concerns over potential tax implications or stricter government interventions prevented many from participating fully in the rally.
Psychological Barriers
The psychological scars from previous market crashes played a significant role. BTC Bull Run, Still reeling from the losses incurred during the 2021 crash and the subsequent bear market, many retail investors found it hard to trust the rally. Fear of another downturn kept them on the sidelines.
Institutional Domination
The 2024 rally saw significant involvement from institutional investors, who executed large-scale trades that influenced market dynamics. This made it harder for retail investors to compete, as price movements were often too rapid for smaller players to act upon.
In Summary
The 2024 Bitcoin bull run was largely driven by institutional investors, not retail investors, and prices surged beyond $70,000. Reasons for the increase included expectations of the Bitcoin Investors halving event, clear regulations, and positive macroeconomic conditions. Timing issues, a lack of expertise, regulatory fears, and psychological obstacles from previous crashes all contributed to ordinary investors’ reluctance to join the market. Low trading volumes and fewer coins accessible on exchanges resulted from a supply shock that occurred despite the high prices of Bitcoin. Many investors chose to hold their coins rather than sell them.
[sp_easyaccordion id=”113″]
