Since the recent presidential inauguration in the United States, the cryptocurrency space, particularly Bitcoin (BTC), has experienced a marked slowdown in spot demand growth. Such demand growth is crucial for any significant rally in BTC prices; however, indicators suggest that this metric has stalled. Reports from influential analytics firm CryptoQuant indicate that although general spot demand has waned, a distinct trend has emerged where large investors in Bitcoin are re-entering a phase of accumulation, signifying a contrasting behavior in different segments of the market.
Shifts in Demand Metrics
The apparent demand for Bitcoin, which initially soared dramatically, is now expanding at a substantially more moderate rate. To illustrate, the demand for Bitcoin plummeted from an impressive 279,000 BTC at the beginning of December 2024 to a mere 75,000 BTC currently, showcasing a significant decrease in the pace of expansion. Moreover, this slowdown is further highlighted by the diminishing demand momentum which has drastically dropped from 1.7 million to just 0.1 million BTC in the same timeframe. Such metrics suggest an urgent need for revitalization in demand growth to facilitate any meaningful price rally for Bitcoin.
Large Investors in Focus
Interestingly, recent periods highlighted a surge in demand growth among large Bitcoin investors right before President Donald Trump’s inauguration. Reports indicated a notable increase in large investors’ BTC holdings, which rose from a slight negative growth of -0.25% to a more promising +2% within a few days surrounding the inauguration date. This notable uptick represents the highest monthly growth rate observed since mid-December. Data further aligns with the findings that these larger players have been pivotal in driving the market’s demand and pricing dynamics, especially following the recent presidential election.
In a stark contrast, smaller investors have been seen retreating, a trend that is detrimental to collective market strength. Between November 2024 and January 2025, large investors increased their total BTC holdings from 16.2 million to 16.4 million. Conversely, smaller investors’ holdings shrank from 1.75 million to 1.69 million BTC, highlighting a worrying withdrawal among smaller market players. This divergence suggests that large institutional investors are positioning themselves for potential price increases, while smaller investors’ confidence fades.
The dynamics of selling pressure have also undergone significant changes. During a peak in the market in December, realized daily profits reached an astounding $10 billion, coinciding with Bitcoin’s surge toward the $100,000 mark. However, current data shows those profits have drastically receded to about $2 billion to $3 billion, indicating traders have largely completed their selling activities. Moreover, trends indicate unrealized profit margins among traders have decreased to levels that traditionally represent a price floor, suggesting an environment where fewer returns are available from selling.
The current state of Bitcoin’s market reflects a complex interplay of large investor accumulation alongside waning demand from smaller investors. As Bitcoin navigates these shifting dynamics, the road to potential price recovery hinges primarily on restoring growth in spot demand, essential for reinvigorating market confidence and price rallying.