Bitcoin (BTC) briefly hit $ 13,000 on October 21, 2020 for the first time since 2019, before falling below the mark. Probably the cause of the sudden price spike is the news that PayPal is introducing bitcoin calling options.
Bitcoin hit $ 12,000 on Oct 21, rising by $ 13,200 before being corrected to $ 12,860. Since then it has been going up and down the $ 13,000 mark.
2017 X 2020, what has changed in the Bitcoin ecosystem?
Professional traders increased their short positions when the price of Bitcoin topped $ 12,000, data shows
The fundamental difference between the 2020 increase and the 2017 increase lies on the stage. In 2017 there was a big uproar over Bitcoin, Driven by emerging ICOs that moved large sums of money and attracted the attention of many investors who saw opportunities to use and speculate on new cryptocurrencies.
Two years ago, the crypto market was flooded with ICOs introducing new digital currencies that promised to decentralize different sectorsfrom social media to cloud computing. Investors expected that one or more of these coins would break out to challenge Bitcoin’s dominance.
But nobody has started since then. Bitcoin now has 67% of the market value of cryptocurrencies, according to Coinmarketcap.
When the boom happened in 2018, both Bitcoin and the entire crypto market fell bitterly throughout the year, allowing the market to grow without speculative pressure. In 2019, Bitcoin spent the whole year swinging little and stuck in the $ 7,000 range after a boom that took it to $ 13,000 and then lost steam and stalled.
The biggest change in the past two years has been institutional awareness of Bitcoin. The assets are managed by the main institutional actors such as Fidelity, Square, the Chicago Mercantile Exchange and, since yesterday, PayPal.
The world scenario has also changed significantly, giving Bitcoin the opportunity to stand out in a scenario of crisis and uncertainty caused by the Covid-19 pandemic.
Interests in Bitcoin and the overall blockchain technology market now come from two areas: companies like Facebook that want to use the blockchain technology that Bitcoin supports to create their own currencies, and governments that want to create digital currencies through their own coffers are guaranteed. , the CBDC.
The question now is: Are major digital currencies like Bitcoin being decentralized, supported by companies like Facebook’s Libra, or controlled by governments like China’s cryptocurrency systems? The political instability caused by the trade war between China and the United States can accelerate the issuance and adoption of sovereign digital currencies.
It is important to identify the halving as a major event and its medium- and long-term implications for Bitcoin. On average, we have historically seen a significant increase in value between 6 and 18 months after the halving. Hence, Bitcoin is expected to deliver even more outstanding highs in the coming months.
The hash rate as an effect and cause of the Bitcoin price
If we look at the correlation between the hash rate and the price of bitcoin, we see a sharp increase in hash rate that followed a sharp increase in bitcoin price.
It’s important to note that the hash rate has increased significantly over the past few months. The hash rate on October 20 is 149 TH / s, which is more than ten times the same period in 2017.
This means that miners are constantly buying new equipment and joining the network. They believe that even with the rewards distribution declining, mining will remain profitable.