Bitcoin (BTC) is continuing to show strong momentum even after a major rally. Key data points show that the uptrend has likely been fueled by smart money in recent months. This means retail or mainstream investors have been largely on the sidelines as BTC price surpassed $15,000 this month.

In 2017, when the price of Bitcoin hit an all-time high at $20,000, the retail demand was at its peak. Google Trends data soared, mainstream media coverage noticeably increased, and spot exchange volumes exploded across major markets, especially in South Korea and Japan.

This time, the Google Trends interest is relatively low for the keyword “Bitcoin” while on-chain data shows smart money is accumulating BTC.

High-net-worth investors are buying Bitcoin

Moreover, according to on-chain analyst Willy Woo, it has been mostly high-net-worth investors who have been purchasing Bitcoin.

Bitcoin mean transfer volume. Source: Glassnode

When whales buy Bitcoin, they mostly facilitate the deals through the over-the-counter (OTC) market. Over time, spot and derivatives markets trail the OTC market as whales lead the upsurge. Woo said:

“Who has been buying this rally? It's smart money... High Net Worth Individuals. You can see the average transaction value between investors taking a big jump upwards. OTC desks are seeing this too. Bitcoin is still in it's stealth phase of its bull run.”

The trend of whales frontrunning retail investors is optimistic because it shows Bitcoin is still in its nascent bull phase. Large capital from new retail and mainstream investors is yet to enter the cryptocurrency market.

Another Glassnode metrics paints a similar trend. The number of Bitcoin addresses holding more than 100 BTC hit a seven-month high at 16,271.

The number of addresses holding over 100 BTC. Source: Glassnode

New money is pouring in

Whales consistently buying Bitcoin over the past few months is optimistic in itself. But, Woo emphasized that the number of new whales has also increased.

If the number of addresses containing large amounts of Bitcoin increases, analysts consider it as an overall spike in new whales.

The rise in more high-net-worth individuals accumulating Bitcoin coincides with the start of the recent institutional frenzy around BTC.

Following Square’s BTC purchase worth $50 million, the number of high-net-worth investors in the Bitcoin market noticeably increased. Woo explained:

“Best of all we are not just seeing smart money flow in, it's NEW smart money. Orange line is the rate of new investors coming in per hour previously unseen before on the blockchain. It's seriously bullish.”

Google Trends data shows relatively low retail interest

Google Trends data is indicating a similar narrative as on-chain data points. The search volume for the keyword “Bitcoin” is currently less than 10% compared to the 2017 top.

Bitcoin search volume on Google. Source: Google Trends

Nevertheless, while the search volume for Bitcoin remains low, there is a particularly high interest coming from states like Hawaii, California, Nevada and Washington.

Bitcoin search interest by subregion in the U.S. Source: Google Trends

Interestingly, California and Hawaii rank as the third and fourth highest in per capita income by state in 2020.

Moreover, San Jose/San Francisco in California i.e. Silicon Valley is ranked as the top metro region for Bitcoin interest. Silicon Valley is, of course, home to many high-net-worth investors and entrepreneurs.