Bitcoin has been on something of a roll these past two months, and naturally, many analysts are thinking to compare the present bull run of the world’s biggest and most popular cryptocurrency with the one that occurred in 2017.
Is Bitcoin Up to Its Same Old Tricks?
During that time, the digital asset reached an all-time high of nearly $20,000 during the final weeks of the year. It’s a number that’s never been surpassed, nor has bitcoin ever come close to it again.
It was a glorious time for crypto and those invested in it, but it did come with a heavy price. The currency entered a nasty reversal the following year. In 2018, bitcoin fell to the mid-$6,000 range during the summer months. It stayed there until the Thanksgiving holiday. During that period, a bitcoin cash hard fork occurred that resulted in an entirely new currency known as bitcoin SV (BSV). The currency split the industry down the middle, and bitcoin and its altcoin cousins suffered for it.
BTC ultimately fell by more than 70 percent from its all-time high, dropping to around $3,500. That means that in less than 11 months, the currency lost nearly $17,000 from its price. Additional currencies, such as Ethereum (ETH) and EOS (EOS), suffered even more, dropping by roughly 90 percent.
In 2019, bitcoin and its digital brothers and sisters began to show promise again, with bitcoin rising to more than $13,000 last July, but this bullish run didn’t last long, and the currency ended the year at just over half that price. Now that the currency has once again (albeit briefly) ascended beyond the $10,000 mark, many are wondering what trick bitcoin is hiding up its sleeve.
Analysts are debating on how similar this run is to the one that occurred three years ago, and most agree that the 2020 run is completely different. That the 2017 event occurred too fast, while this year’s rally is cemented by more than simple speculation.
Crypto firm Glass Node took to Twitter to explain:
During last summer’s rally, we saw highs of over 60,000 unique daily deposits – likely investors taking profit. Since then, [bitcoin exchange deposits] have decreased by nearly 60 percent down to about 25,000.
Analyst Willy Woo echoed this sentiment, explaining that the rally bitcoin is enjoying now has a lot to do with investors doing things correctly and not cashing out as soon as they gain a few dollars. He writes:
This breakout is the real deal. Fundamental investment activity is backing this $10,000 breakout.
Institutions Are Taking a Greater Stand
Michael Sonnenshein – managing director at Grayscale – attributes the present rally to a surge in the institutional presence in the crypto arena, claiming:
If the persistent question is ‘where are the institutions investors in crypto?’ the answer is that they’re here and showing up in a meaningful size.