Bitcoin's recent surge stumbled at the $97,000 mark as the funding rate showed little movement, and retail investors largely remained on the sidelines. The question now is whether traditional finance can revive Bitcoin's push towards the $100,000 milestone. Despite Bitcoin's recovery, retail traders have not jumped back into the fray, pointing to weak investor confidence, as per the subdued funding rates and minimal interest.
While institutional investors are once again buying Bitcoin spot ETFs and companies are bolstering their Bitcoin reserves, this could potentially propel Bitcoin back to $100,000. On Thursday, Bitcoin's price steadied around $95,500 following an 8% rally over three days, which led to the liquidation of $465 million in short Bitcoin futures positions. Yet, the pullback from its peak of $97,900 might have dampened investor enthusiasm further.
The annualized funding rate for Bitcoin perpetual futures was recorded at 4% on Thursday, reflecting a tepid demand for bullish bets. Typically, in neutral market conditions, this rate fluctuates between 8% and 12% to cover capital costs. Retail traders favor these derivatives because their pricing closely mirrors the spot market, unlike the monthly BTC contracts available on CME.
Even as the tech-heavy Nasdaq index edged within 1.6% of its all-time high, buoyed by TSMC's 35% quarterly earnings growth, Bitcoin remains 25% shy of its peak valuation of $126,219. Significantly, overall interest in the cryptocurrency sphere is waning. Google Trends data illustrates that global search queries for 'crypto' stand at 27 on a scale from 0 to 100, nearing the 12-month low of 22.
Retail investors often chase recent high performers, as seen with silver's 28% price jump over two weeks. Although Bitcoin is often compared to precious metals, crypto traders are typically more focused on short-term gains. Some of the skepticism among Bitcoin traders is fueled by socio-political uncertainties and worries about the US Federal Reserve's independence. The US Justice Department is investigating cost overruns in the Federal Reserve's building renovation, sparking concerns about potential political pressure to lower interest rates. With Fed Chair Jerome Powell's term ending in April, traders are bracing for more robust economic stimulus in the latter half of 2026.
Bitcoin has yet to establish itself as a dependable hedge during economic instability. Consequently, even with gains in equities and precious metals, retail traders fear that cryptocurrencies might suffer the most in a downturn.
Further escalating tensions, former President Trump has threatened retaliatory measures against Iran for its harsh crackdown on anti-government protests. Iran, a significant oil producer, also controls a key global chokepoint for oil tankers, adding to the geopolitical uncertainty after a US military operation captured then-Venezuelan leader Nicolas Maduro on January 3.
Despite the muted interest from retail investors, the Bitcoin spot ETF market remains robust, with assets surpassing $120 billion. Public companies continue to emulate the strategy of Michael Saylor's firm by purchasing over $105 billion in Bitcoin. Institutional demand, which gained momentum through 2025, might eventually drive a sustained bullish trend towards $100,000.