Bitcoin (BTC) price officially hit a new all-time high of $ 19,892 on December 1st after almost three yearsaccording to data from Coinbase Y. Trade view.
Despite the Thanksgiving collapse last week The price for BTC was able to recover over the weekend. BTC then It easily passed the $ 19,000 mark on Monday, hitting its all-time high.
There are three major trends that drove BTC’s surge from under $ 3,600 in March to over $ 19,892. These include The surge in institutional demand, lower selling pressure and resistance from BTC over the course of 2020.
Data suggests that institutional demand fueled the rally
Most of the chain data points show this The institute’s demand for Bitcoin has increased rapidly.
In November, Grayscale achieved a record result and the CME Bitcoin futures market saw its interest open go nearly a billion dollars.
In particular grayscale, In the third quarter of 2020, more institutions invested in cryptocurrencies than ever before.
The numbers that see grayscale are important in measuring institutional interest in Bitcoin because Grayscale Bitcoin Trust is usually the first point of entry for most institutions to get involved in BTC.
In the United States, There is no Exchange Traded Fund (ETF) for Bitcoin and other major cryptocurrencies. Therefore, Grayscale Bitcoin Trust is the closest investment vehicle to an ETF in the US market. The company report states:
“More institutions invested in the third quarter of 20 than ever before, increasing their average allocation from USD 2.2 million in the third quarter of 19 to USD 2.9 million in the third quarter of 20. Institutions familiar with several products within the Grayscale suite hired almost twice as many investors on average for a single product in the third quarter of 20. “
As Cointelegraph reported in August, MicroStrategy bought $ 450 million in BTCAcquisition of Bitcoin as the main part of the Treasury Department. It was likely the spark that sparked the current wave of institutional demand for digital value storage.
This was accompanied by high profile orders from the likes of Bitcoin to Bitcoin all summer Paul Tudor Jones and later Stanley Printmillerwhich only fueled the positive market sentiment.
I call this painting “The Traditional Attack”.
We have been talking about “The Herd” for over 3 years. The herd needs professional risk coverage. That’s it.
– Travis Kling (@Travis_Kling) November 30, 2020
In November, Druckmiller stated that Bitcoin is likely to stayas it does significantly better than gold in 2020 and says:
“It’s been around for 13 years and every day it’s regaining more of its stabilization as a brand.”
Low income from whales
Six months after the halving November also had little pressure to sell whales, according to the chain. In other words, The amount of Bitcoin sent to wealthy investor exchanges steadily declined over the month.
The CEO of CryptoQuant, Ki Young Ju, the Exchange Whale Ratio Index listed as an indicator of long-term bullish market sentiment. The said ::
“Dear $ BTC shorters, you can call me a moon boy, but unfortunately there won’t be a sell-out like this March. The Exchange Whale Ratio (90-day moving average) is still very low. The long-term upward trend is inevitable. “
The slight selling pressure on BTC helped keep the rally going through the monthwhich eventually allowed the dominant cryptocurrency to hit a record high.
Bitcoin’s resilience was an important factor
June 13th JPMorgan said in a note that Bitcoin’s rebound after its March crash showed it was persistent.. Recognition of Bitcoin resilience from America’s largest investment bank likely acted as a big confidence boostespecially for institutional investors.
Ultimately, the impressive performance of the past decade and strong momentum for Bitcoin as it fell below $ 3,600 on major exchanges in March ddemonstrated the resilience and long-term potential of BTC as a digital store of value.