What to know:

Retail investors have largely avoided the recent bitcoin rally, with interest levels far below those seen in 2021.

Despite bitcoin reaching an all-time high, traders remain cautious, as evidenced by lower funding rates and increased short positions.

The current market sentiment suggests a shift towards more sustainable trading practices, potentially paving the way for long-term gains.

What happens when retail logs off from crypto and Wall Street tunes in? Looking at bitcoin's BTC$109,671.85 recent all-time-high, one would say it feels bullish and the industry is maturing.

That might as well be the case, but we might not be there yet. So before we floor our Lambos, let's look under the hood.

First things first, retail investors have basically ghosted this rally. A quick search on Google Trends using the keyword "bitcoin" shows that the surge that was seen back in 2021's bull market is non-existent. Back then, everyone and their grandmothers were Googling bitcoin, aping into altcoins and flooding the social media with rocket emojis. In 2025? It's a ghost town in retail-land.

There was a blip of high retail interest surrounding the U.S. presidential election, when a short-lived memecoin mania took over retail sentiment. However, that surge is long gone, as memecoin prices tanked swiftly, even as bitcoin hit an all-time high this week, ripping past $111,000.

"Early in this cycle, memecoins became a concentration of risky retail-driven trading with related trading peaking in January," said Toronto-based crypto platform FRNT Financial. "However, since then, there has been a virtual wash-out of interest and memecoin trading activity," which shows "the tepid risk appetite in crypto at the moment," FRNT added.

Translation: "Wen Lambo" crowd got burned, and they aren't rushing back into the race track en masse anytime soon.

From Lambos to Corollas

On the topic of risk appetite, let's go back to the car analogy.

During the 2021 bull market, people bought unreliable performance cars, stripped out the brakes and seatbelts to go faster than ever before, and did not care that there might be engine blowouts. As long as there was a promise of reaching the moon, bullish vibes were all that mattered.

Now? After losing tremendous amounts of money on those unsustainable go-fast cars for years, traders are driving Toyota Corollas—sensible sedans that are slow but steady and still on the road.

That risk-off sentiment is also evident from the funding rates, according to FRNT's analysis of BTC perp rates—a measure of how much traders are willing to pay to maintain their long positions. When bitcoin reached a record high of around $42,000 in January 2021, the perp rate was about blistering 185%. Today, at bitcoin near $110,000, the rate is near 20% on crypto options exchange Deribit, meaning the risk appetite isn't completely gone but nowhere near the 2021 frenzy.