Cryptocurrency enthusiasm has taken a backseat, with online search interest for common crypto terms falling to late 2020 levels. The Google Trends data reveals that the term “crypto” has plummeted to a score of 17, down from its reference point of 100 in May 2021. Bitcoin (BTC) and Ethereum have followed a similar trajectory. However, this decline has been relatively consistent since May 2022, when much of the Terra Luna ecosystem collapsed.
Interest has not dipped in every domain of crypto, though. Search volumes for “decentralized finance” and “defi” have managed to increase in 2023, while searches for “memecoin” reached a peak in early May. It is also worth noting that Nigeria currently holds the highest score for most crypto-related searches, while many of the lowest scores come from South American countries.
On the other hand, search interest for artificial intelligence continues to skyrocket, with many believing it to be the latest “tech fad.” It is clear that cryptocurrency has lost some of its shine, but it is important to note that digital assets remain a viable investment opportunity and a key part of the global financial landscape.
The fall in interest comes as Bitcoin (BTC) has held steady around $28,000 for 10 weeks now – something which Galaxy Digital CEO Mike Novogratz recently described as “lackadaisical,” due to a lack of “institutional excitement right now.” Guy Turner, commonly known as “Coin Bureau Guy,” suggested in a June 4 Twitter post that the fall in interest also coincides with lower trading volumes on exchanges, which is claimed to have reached a 32-month low last month.
The Alternative Crypto Fear & Greed Index tells a similar story, with market sentiment hovering around its current score of 53 – in the “Neutral” zone – for nearly a month now. However, this doesn’t mean that crypto traders are all sitting on the sidelines or that the market is stagnant. Quite the contrary, the lack of exuberance in the market might actually be a good sign after years of price bubbles and unsustainable speculation.
Despite the recent slump in interest, institutional investors remain bullish on the future of cryptocurrency. A survey conducted by Fidelity Digital Assets revealed that nearly 80% of institutional investors find something appealing about digital assets, with more than half of them citing low correlation with other asset classes as the primary incentive for investing in crypto.
Institutions are also extremely interested in crypto ETFs, according to a survey conducted by Bitwise Asset Management. The survey found that institutions are looking for regulated ETFs, with 58% stating that regulatory approval is the most critical factor in their decision to invest in crypto. However, the buying has cooled in the short term, likely due to the lack of regulatory clarity in the US.
It is also worth acknowledging that interest in cryptocurrency tends to be cyclical, with periods of high and low enthusiasm regularly occurring. For instance, the cryptocurrency hype cycle returned in early 2021, with mainstream investors flocking to Bitcoin and other cryptocurrencies. This cycle may repeat again in the future, especially if cryptocurrencies continue to attract institutional investors and policymakers.
In summary, while the recent slump in interest and sentiment is apparent, it does not represent the end of cryptocurrency. Digital assets remain a viable investment opportunity and a significant part of the global economy but are currently facing a lull in enthusiasm. It will be interesting to see how the market develops in the coming months and years, with institutional investors and regulators playing a crucial role in shaping the future of cryptocurrency.
