Bitcoin is enjoying a historic run. The currency recently beat out its previously set all-time high, which occurred in December of 2017. Now, the currency has settled down a bit, but remains above $19,000 at the time of writing.
Bitcoin Is Exploding As of Late
Many are wondering if a setback is likely to occur this time around. That’s a big fear considering how similar this bitcoin run has been to the one from three years ago. As we all remember, the currency rose to nearly $20,000 per unit during the Christmas season of 2017, but just a few weeks later, the asset found itself dropping. By the beginning of February 2018, the currency had lost more than $10,000 off its price.
Not long ago, the currency suffered a slight retrace that brought it back down into the $17,000 range, though the currency eventually brought itself back up the financial ladder. Some believe that this was just a standard and healthy consolidation for the world’s largest digital asset. For other analysts and industry experts, however, this is a sign of doom that cannot be ignored.
The good news is that this bull run is quite different from the one experienced three years ago. Blockchain firms such as Van Eck claim that this run is stronger and more sophisticated when compared to the one of 2017, given that the previous run was largely driven by FOMO or fear of missing out.
In a statement, the company mentions:
While the 2017 bitcoin rally was driven by higher volumes, likely due to retail demand, the 2020 price rally so far has been driven by lower volume. We believe the 2020 rally is driven more by institutional allocation and that investing in bitcoin has become less speculative in nature, which indicates bitcoin’s increasing status as a store of value and suggests further potential adoption.
The sentiment is that the bad actors that falsely pushed bitcoin to its record high in 2017 are now out of the picture. This time, its institutions that are largely responsible for bitcoin’s meteoric rise. In addition, the coronavirus is helping people to see bitcoin in an entirely new light. It’s not simply a speculative asset anymore, but rather a tool that can hedge wealth and keep one’s portfolio safe during a time of harsh economic circumstances.
It’s Institutions Behind the Wheel
Van Eck goes on to say:
We note that the current rally is supported by PayPal’s launch of a new service enabling bitcoin and digital asset buying and selling to its network. PayPal services 26 million merchants and 346 million clients globally. So Fi, Robinhood and other major financial companies offer similar solutions. Banks are also looking to offer bitcoin exposure to compete with fintech offerings to retain and grow client bases.