Why isn't Bitcoin experiencing explosive growth like it used to? An expert reveals the key reasons

Why isn't Bitcoin experiencing explosive growth like it used to? An expert reveals the key reasons

In recent years, we have seen many changes in the Bitcoin (BTC) market. While we used to experience rapid and sudden price increases, today the market seems surprisingly calm. What is behind this phenomenon? Cryptocurrency expert Crypto Dan of CryptoQuant provides an analysis that sheds light on the two main reasons why such fluctuations are no longer common.

A calm market in unusual times

According to Dan, even though the price of Bitcoin is currently rising, the market is behaving more calmly than in previous bull cycles. This calmness, he says, is due to two key factors: changing macroeconomic conditions and market dynamics.

1. Changes in the macroeconomic environment

Dan points out that the bull markets of 2020 and 2021 took place in an environment of near-zero interest rates and aggressive quantitative easing. Today, however, we are in a period of high interest rates and limited liquidity, which means that capital flows are not as free as they used to be. This shift makes it difficult for Bitcoin prices to fluctuate rapidly and widely.

2. Dominance of institutional investment

Another factor Dan mentions is the shift from individual investors to institutional capital, which has been supported by the approval of spot Bitcoin ETFs. Previously, it was retail investors that drove the market forward, but now institutional capital dominates, leading to a more stable and less emotional rise in the Bitcoin price.

This institutional behavior is reflected in the data on the chain, which suggests that the market may be at the top of the cycle. However, Dan believes that the current phase does not represent a traditional boom and bust, but rather a longer and more complex market structure.

What does the future hold?

Dan sees hope for the future. ‘ETF inflows are still continuing, and if the macro environment gradually eases, we could see significant trends in 2025,’ he says. Clearly, despite the current market calm, there are opportunities for further growth and development that could bring new opportunities for investors.

While today's Bitcoin market appears to be less dynamic than in the past, changes in the macroeconomic environment and the growing dominance of institutional investment may suggest that the future offers new and interesting challenges and opportunities.

*This is not an investment recommendation.

Coingarage team